Volvo Exec Survives Whirlwind Meetings With 300 Dealers

LOS ANGELES – Volvo’s Anders Gustafsson, during a whirlwind week, met with all 300 of the Swedish automaker’s U.S. dealers.

In the regional meetings, the dealers sat in a circle. Gustafsson, Volvo Car USA’s senior vice president-Americas, stood in the middle, talking to them, answering questions and trying to quell some concerns.

“I survived that circle,” says Gustafsson, who is from Sweden, a country that’s partly in the Arctic Circle and the home of Volvo Cars.

He says U.S. Volvo dealers, “who have been through a lot,” weren’t sad at the meetings, but weren’t happy either. Then again, “I’ve never met an entirely happy dealer in my life.”

Some dealers were tougher audiences than others. “I learned a lot,” he says. “I loved the New York dealers but they were tough, really tough. They prioritized issues. Profitability was at the top of the list.”

Gustafsson is on the same page there. “I talk about profitability, because it’s an industry issue,” he says at an automotive conference here put on by J.D. Power and the National Automobile Dealers Assn.

Volvo dealers have seen some profit improvements in the past five years, he says. “We’re a little better, but we have issues with throughput (average sales per store).”

Volvo’s U.S. lineup consists of three SUVs and four cars. Last year, SUVs outsold cars two to one, 58,403 units compared with 24,321, according to WardsAuto data. An all-new compact SUV, the XC40, joins the lineup in March.

Volvo’s sales of 82,724 vehicles in the U.S. is about 0.5% of total market share in the country, but represents about 20% of Volvo sales worldwide. Sixty percent of its sales are in Europe. Since 2010. Geely Holding Group, a Chinese multinational automotive company, has owned Volvo, based in Gothenburg, Sweden,

Gustafsson defies the stereotype of the reserved and laconic Scandinavian. He’s affable and loquacious.  “I like to hear myself talk,” he quips.

He describes Volvo’s U.S. dealers as “extremely professional” in voicing their concerns.

One of them was fear that the automaker was trying to take over the relationship with consumers. “That is not the case,” Gustafsson says.

“If we don’t have trust from dealers, they’ll absolutely not support us,” he adds. “We need solutions that work for everyone.”

His solutions include using technology that reduces operating costs, maximizing new-car sales by shortening buying cycles and improving used-car operations by “taking control of residual values.”

The latter is “tricky, but it’s one of the reasons I’m here,” he says of his U.S. posting.

Of course, selling more vehicles enhances profitability, as long as an automaker isn’t pushing volume in the absence of demand. All automakers want to improve vehicle sales. “It’s not fun to call headquarters and say we are behind,” Gustafsson says.

One of his messages to dealers was “we need to help each other.” Another message was more blunt.

“I also told them I’m not Santa Claus. I’m not coming from Europe with money to hand out.”

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