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Reimagining Car Ownership

An Interview with Alexander Lvovich, Managing Director of Volvo, Canada

— November 1, 2018 — Business
Care by Volvo recently entered the Canadian market as a subscription service that grants consumers access to luxury cars. Initially launched in the US, the service has seen a surge in popularity and attracted younger demographics to the Volvo brand due to its fresh take on car ownership.

Trend Hunter spoke with Volvo Canada's Managing Director Alexander Lvovich to get a better understanding of how technological innovations are impacting the car industry, how the concept of Care by Volvo was formed, and how it is being received by consumers.

Care by Volvo is a response to the change of traditional modes of ownership in the digital age. Can you tell us more about how the tech world has impacted Volvo within the context of car ownership?

In the last five years, Volvo’s transformation has been driven by the changes in the tech world. For example, last year we announced a major commitment to electrification. As of 2019, every new Volvo will have an electric motor, and we will launch five fully electric cars between 2019 and 2021. We launched our Volvo on Call app that gives drivers the option to remote start the vehicle, adjust the temperature in the car and check if the car is locked, among other functions.

Technology influences our product development and that’s why we’ve started to look at car ownership differently and introduced the first-ever car subscription program. Care by Volvo changes the way consumers own a vehicle—in under 10 minutes you can order a car using your smartphone. It’s simple, sets a predictable price every month and lets you change into a new car every year. We developed Care by Volvo because we looked at the industry as a whole. Subscription plans are a big part of the tech economy. We see a much higher adoption of subscription in different parts of our lives and Volvo is the pioneer in the car ownership category.

The service is clearly convenient and offers users peace of mind with the added services. Are there plans to evolve Care by Volvo to include lower-tier car options or are you keeping the offerings to only luxury vehicles?

Volvo is a luxury brand, so we compete in certain segments of the market. Our offer appeals to the segment of luxury cars. Within this market, we launched Care by Volvo with the Volvo V60 luxury estate and Volvo S60 sports sedan — our new entry-level Wagon and Sedan. That’s the introduction to the Volvo brand. We wanted to start with something that is more affordable within the segment and something that can capture people who are new to the brand, a younger demographic. From our experience in the United States, where we launched Care by Volvo about a year ago, the average customer age is ten years younger than our traditional customer. Over 90% of the people who are using Care by Volvo are new to the Volvo brand. Launching the subscription on the entry-level vehicles gives us this opportunity to attract new audiences with a compelling offer. The S60 and V60 are available with two different stream levels and packages. Both are well-equipped, but it still gives you an opportunity to take a step up from a Momentum to an R-Design to provide choice. Someone who wants an entry-level vehicle that is well-equipped — they’d go with Momentum, and somebody who wants a sportier driving experience would go with the R-Design.

To put that into context, what is the age of your average customer?

Traditionally, our demographic is somewhere in the mid-40s to mid-50s. With this program, we are attracting customers that are ten years younger than our traditional demographic in the luxury car segments.

What do you think is the number one advantage that Care by Volvo will be able to offer the consumer?

There are several advantages that will attract the majority of our customers. One is that we have one price across the country, coast to coast, that includes a full suite of services, from maintenance, concierge service, wear-and-tear protection, and the winter tires that are obviously important in Canada. So, everything is included in one simple offer, for one set price.

The second big advantage is that you can switch to the latest and greatest in technology as early as one year after you pick up the car. So you can stay on top of our technological development as we launch new cars and use new equipment in our existing line-up. And, of course, the ability to order it online, from the comfort of your home, that's something that everyone is getting used to these days.

Is there an option where drivers can opt-in to buy the rented vehicle?

We will give an option for people to buy the vehicle. The standard offer is that in the end-of-year cycle, you can buy the car. That’s always on the table.

How has the responsiveness of the Canadian audience been?

The reception was really, really great. We received the first order 15 minutes after we went live with the program. We were very pleased with it — it was a V60 R-Design. We have been getting orders steadily all week, last week and we are pretty much on track with our expectations. So, we are in good shape.

Photo Credits: Volvo Canada