Automotive News Canada - February 2020 - v2 - 6

6

Volvo's new
retail plan?

Involve
dealers

The company slipped from
fifth spot out of 25 for dealer
satisfaction in 2016 to 21st spot
in 2018; Managing Director Matt
Girgis took a logical but rare
approach for a solution
By PERRY LEFKO

TORONTO CORRESPONDENT

THE HEAD OF VOLVO CANADA TURNED TO
dealers for input to formulate a national sales plan,
a move praised by retailers who were unaccustomed
to such outreach.
"That's a huge change in Volvo Canada," said
Rob McMillan, who since 1996 has been dealer principal of Volvo of Mississauga, located just outside
Toronto.
"It's uplifting, it's encouraging. You know what
their goals are, we know what our goals are, and we
both work together to get it
done."
Matt Girgis, appointed
managing director of Volvo
Car Canada last July, said he
decided to open the communication channels with the
brand's 38 dealers to determine individual sales projections and budgetary needs
over the next five years. That
information was used to calVolvo Car Canada's
culate a 2020-25 Canadian
managing director,
sales forecast, which was to
Matt Girgis, used
be unveiled Feb. 18 at a Volvo dealer input to
conference of the Americas in calculate the
Las Vegas.
brand's 2020 to
"The dealers should be
2025 sales forecast.
ready [for this vision] because P H O T O : F I L E P H O T O
they helped create it," Girgis
told Automotive News Canada in January.
"It's important to have communication flows and
inclusion with our partners. We're in a dynamic
business with differences across the country, so it is
important to have channels to bring their input into
our planning."

'POSITIVE,' WITH 'CHALLENGES'
One dealer who spoke on condition of anonymity called Girgis's approach "positive," although
"there's still lots of challenges for Volvo."
In the 2018 Dealer Satisfaction Index Survey,
released last year, the automaker "ranked next to
dead last in dealer satisfaction," the dealer noted.
According to the study, obtained by Automotive
News Canada, Volvo ranked 21st out of 25 automakers, down from 16th place in 2017 and fifth in 2016.
Girgis began the consultative process in October
when he met with dealers in Kelowna, B.C., where
he discussed Volvo's five-year electrification plan.
He asked dealers to review their businesses to
determine what they needed to be profitable and
what they thought Volvo needed to do.
"They run their businesses," Girgis said, "so
they need to have a view of what it means to be
profitable into the future, what kind of throughput
they need, how many bays they need, what their
service departments are going to look like and what

* F E B R U A R Y 2020

Mississauga-based
Volvo dealer Rob
McMillan says the
automaker's outreach
has meant a two-way
dialogue on goals
and expectations.
"It's uplifting."
PHOTO: PERRY LEFKO

TRENDING
STORIES
automotivenews.ca

ONGOING WEB COVERAGE

FCA-PSA
MERGER
Fiat Chrysler Automobiles CEO Michael Manley wants a deal

within 14 months. The automakers are now getting into the details
of how the merger will work, including choosing which vehicle
platforms will fit which products in a combined company.

PRODUCTION
CUT
FCA insists the third shift will eventually go away at the Windsor, Ont.,
kind of technicians they need.
"They need to think that through, and we need to
look at it together from a national level and say this
is our strategy that we stand behind together.
"I would be very surprised if they are surprised
[by the plan] because they've been part of the journey."
To ensure dealers felt comfortable speaking freely, Girgis said, he recruited Alain Desrochers, the
outgoing manager of Volvo's Retail Advisory Board,
to conduct individual interviews for input from dealers.
"With this scenario, they've asked us for relatively accurate numbers," said John Martins, a 22-year
Volvo veteran with dealerships in the southern
Ontario cities of Hamilton and Oakville. "Nobody
told us, 'This is what I think we're going to do ...' It
wasn't dictated to us."

'PLAYING FOR SAME TEAM'
Chuck Seguin of Seguin Advisory Services, which
focuses on automotive retailing, said automakers
will have to engage retailers to ensure both sides can
thrive in a changing landscape.
"The collaboration between brands and dealers
is getting much closer," said Seguin, who wrote a
report last year on the future of auto retailing for the
Canadian Automobile Dealers Association (CADA).
"They are in the same battle. They are playing
for the same team. I think what manufacturers are
beginning to realize is [dealers] should have a voice
at the table before [automakers] finalize their projections, as opposed to after. It's just logical thinking. I
think this is a welcome thing."
Volvo sold 10,155 vehicles in Canada in 2019, a
10-per-cent increase from 2018, according to the
Automotive News Data Center in Detroit. Sales of
certified used vehicles rose 20 per cent, according to
Volvo.
Four new EVs that will be introduced through
2025 will be unveiled at the Volvo conference in Las
Vegas. The XC40 Recharge is Volvo's first EV and it
will be launched this year in Canada.
Girgis would not share details of his retail plan
but said it would emphasize "electrification, customer experience and retention activities related to certified and preowned used cars."
Volvo of Mississauga's
McMillan said Girgis's outreach
creates a unified approach toward
meeting mutual goals.
"He listens to what we have to
say, and he is all-inclusive. The
information is going backward
Mike Norris:
and forward. Before it was one-sid- Volvo wants
ed. Now it's more of, 'What can we to improve
do to help you to do your business communication
so that we both grow together?' "
with retailers.
Mike Norris, dealer principal at F I L E P H O T O
Volvo of Edmonton, said the dealer-automaker relationship works best when the two
sides support the other's role.
"A lot of manufacturers think they are actually
the dealerships, so they want to have the relationships with the clients, and they have no clue who
their clients are and what they are about. Volvo is
certainly trying to improve that relationship [with
dealers], which is good." - ANC
- With files from Grace Macaluso

plant where it assembles minivans. This was first scheduled to happen last September and is now scheduled for March.

VW HIT WITH RECORD ENVIRONMENTAL FINE

The automaker was ordered to pay $196.5 million to the
Canadian government for importing cars that secretly violated the country's emissions standards.
Volkswagen was found in 2015 to have
sold vehicles with software that allowed
them to pass emissions tests despite
emitting nitrous oxide levels up to 35
times the legal limit in Canada.
Ontario Judge Enzo Rondinelli said the
penalty marks "a new era" in environmental protection. The amount is more
than 20 times greater than Canada's
FILE PHOTO
previous record environmental fine.
More than 100,000 VW vehicle owners in Canada were part of a
separate $2.1-billion settlement.

SCOTIABANK: 2M SALES LIKELY AGAIN, BUT...

Canada could return to annual sales of more than two million
vehicles - but not in the near term - according to a new report
by Scotiabank Economics. "Auto sales are in for another bumpy
ride in 2020," the financial institution said. Automakers sold 1.92
million vehicles in Canada in 2019, marking the second consecutive year of sales declines following the high-water mark of 2.04
million sold in 2017, according to the Automotive News Data
Center in Detroit. Scotiabank says auto sales in 2019 were still
"working off the 2017 high following an eight-year expansion."
Scotiabank believes Canada will surpass two million annual auto
sales again, "but not anytime soon."

NEW INFINITI MODEL PUSHED TO NOVEMBER
The luxury brand told its supply chain that it will delay the start
of production of the new QX55 by five months. The vehicle was
to arrive in dealerships this summer as a coupe-like version of
the QX50 compact crossover.
Production was to begin in June,
but it will now start in November,
suppliers were informed in a letter P H O TO : I N FI N I TI
dated Jan. 13 from Nissan North America's manufacturing team
in Aguascalientes, Mexico. The letter vaguely referred to a need
"to ensure production capability" at the plant.

EVs GET A JOLT FROM NATIONAL RETAILER
Canadian Tire will add nearly 300 electric-vehicle chargers at its stores across
the country by the end of 2020, saying
that "the popularity of electric vehicles is
on the rise." The retail giant is working with
FLO as well as Volkswagen Canada subsidiary Electrify Canada, Natural Resources Canada
and Tesla to install 240 Level 3 (480-volt DC) fast
chargers and 55 Level 2 (240-volt) chargers at 90
Canadian Tire locations.

'TIME WILL TELL' IF ANY PLANT JOB CUTS
Unifor President Jerry Dias said he is
optimistic the union will maintain jobs
at the remaining Detroit Three plants
in Canada during 2020 labour negotiations, even as analysts forecast production to drop in the coming years. "It's too
early to tell, but I would fully expect that
2020 bargaining will be successful from
a job-maintenance point of view," Dias
said. "Time will tell." - ANC

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Automotive News Canada - February 2020 - v2

Table of Contents for the Digital Edition of Automotive News Canada - February 2020 - v2

Automotive News Canada - February 2020 - v2 - Intro
Automotive News Canada - February 2020 - v2 - 1
Automotive News Canada - February 2020 - v2 - 2
Automotive News Canada - February 2020 - v2 - 3
Automotive News Canada - February 2020 - v2 - 4
Automotive News Canada - February 2020 - v2 - 5
Automotive News Canada - February 2020 - v2 - 6
Automotive News Canada - February 2020 - v2 - 7
Automotive News Canada - February 2020 - v2 - 8
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Automotive News Canada - February 2020 - v2 - 28
Automotive News Canada - February 2020 - v2 - F1
Automotive News Canada - February 2020 - v2 - F2
Automotive News Canada - February 2020 - v2 - F3
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Automotive News Canada - February 2020 - v2 - F5
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