Volvo concluded its Care by Volvo subscription initiative in August, Automotive News (subscription required) has disclosed.
The initiative was launched in the U.S. in 2017 and encompassed not only the vehicle but also upkeep and insurance in a single monthly fee.
Volvo now intends to redirect its attention to conventional sales and leasing models.
A representative for the automaker informed Automotive News that current participants in the subscription initiative may continue in the program until the conclusion of their contracted period, after which Volvo will provide them with a $1,000 incentive toward a new Volvo acquisition or $500 toward a lease.
Volvo has not disclosed what fraction of customers chose the subscription initiative, but a New Jersey dealer with two locations indicated to Automotive News that approximately 10% of customers utilized the program.
The initiative became profitable in the U.S. by 2020 and also assisted in attracting new customers to the brand, particularly in the younger demographic, as per Volvo.
However, the initiative also complicated the boundaries with dealer franchise regulations, as it bore similarities to a lease in various aspects. Consequently, Volvo in 2019 adjusted the program to be more flexible to distinguish it from leases, by permitting customers to switch vehicles or terminate the subscription without penalty after five months.
Several other automakers provided subscription initiatives, although merely as a pilot. Only Volvo made it available on a long-term basis.
Image Source: Mareks Perkons @ Instagram
