Volvo held 49% more active car subscriptions in 2022 than in 2021, thanks to customer demand for the new ownership model, CEO Jim Rowan has said.
It had roughly 25,100 subscription cars on the road during the fourth quarter of 2022, a significant increase on the 16,900 during the same period in 2021 and 5500 at that point in 2020.
Speaking on a call with journalists following the release of the company’s full-year financial results, Rowan said the subscription model is “here to stay” as customers seek alternative methods of obtaining cars.
He added that Volvo’s forthcoming electric compact crossover, tipped to be called the EX30, will champion the subscription model to make it more affordable to Generation Z. This will allow the brand to “talk to new customers”.
Read more: New Volvo EX30: high-tech Jeep Avenger rival lands in 2023
It’s this focus on customer communication – and ultimately retention – that Rowan is pushing as Volvo’s recently appointed CEO, having come from the consumer technology industry.
Volvo UK’s shift to the agency retail model is all about making sure that the company is “still part of that conversation” with the customer once they’ve bought a car, said Rowan, in a bid to boost retention.
He remarked that he was surprised a $40,000-$60,000 [£33,000-£49,000] product could be sold without its maker ever talking to the customer, saying: “For me, that’s a flawed business model”.
During Rowan’s first year at the helm, Volvo also accelerated its electrification drive. Of the 615,121 cars it sold in 2022, 23% were plug-in hybrids and 18% were electric. Meanwhile, sales of ICE models dipped by 15%.
In Brazil, Indonesia, Thailand and Uruguay, 100% of the brand’s sales were PHEV or EV, while they were 98% in Norway and 91% in Ireland.