Volvo invests in carwow to learn lessons in online retail

Volvo Cars has taken a minority stake in carwow through its Volvo Cars Tech Fund, hoping the success of the online marketplace will help it become better at online selling, customer acquisition and content creation .

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This may seem like a strange move for the automaker when most of its sales are currently made through dealerships and retail partners. However, the automaker is not blind to the fact that markets are changing and many customers are now comfortable shopping online, including cars.

“Third-party marketplaces play a key role in any consumer industry, including Volvo Cars’ competitive landscape,” said Volvo Cars Chief Commercial Officer Lex Kerssemakers. “We were one of the first car manufacturers to engage in online sales and through this strategic partnership, we will learn and better understand online shopping behavior. Our collaboration with carwow will help us, as well than our retail partners, to increase our volumes and achieve our goal of selling approximately half of our volume online by 2025.”

Lessons on how to improve customer satisfaction

carwow, which operates in the UK, Germany and Spain, has had huge success building massive reach with a YouTube channel with nearly 7 million subscribers and a 4.8 out of five customer satisfaction rating for the overall car buying experience. This improves Volvo’s customer satisfaction score of 4.3 for its direct selling program.

Volvo and carwow have collaborated on the automaker’s car subscription service Care by Volvo, so it will be interesting to see how the relationship develops. Both companies are keen to stress, however, that the relationship is not exclusive, which means that they are both open to working with other partners.

Image: Volvo Cars

Anne G. Cash