The fleet market is being pinpointed as where growth potential lies for Volvo as it looks to build on a good 2019.
The brand is in line to hit 56,000 sales this year, with the goal for 2020 still to make it to the 60,000 mark that it set as its target this year.
“In retail we don’t see too much more scope for growth but there is definitely some scope for growth in fleet and definitely in Motability,” Volvo sales director Matt Galvin told Company Car Today. “We did about 1500 [in Motability] this year and we’ll do about 4250 next year.”
However, the extra sales will not all be Motability, as he said that a lot of fleet buyers will be heading towards hybrid, particularly when the first new XC40 plug-in hybrids go out to customers in February.
“In November, 44% of business sales for XC40 into fleet were PHEV,” said Steve Beattie, Volvo’s head of business sales. “We have done some nice batch deals to customers too, one bought 22 and a small public sector company bought 10.”
One area that Volvo will continue to target in the coming year is SMEs.
“When we looked at the beginning of the year we needed a defined strategy on SME and large corporate because we were trying to do them all in the same team,” said Beattie. “The customer that runs five cars and the customer that runs 500 cars are very different animals.
“If you look at the sold orders there is a 37% increase in SME alone. That has also been driven by our PHEVs. A lot of those cars are at senior manager level at maybe £50k, £60k, but SMEs have more power to decide that one of those cars fits into the business.”
Volvo has taken an approach that is steeped in old-school methods for generating this business, with Beattie saying: “We empowered our telesales team to go out and cold-call businesses – all GDPR-compliant obviously – and then once there was an opportunity, that would go to our virtual sales team who would work with the retailer.
“We are growing our database, it has gone from 7000 to nearly 20,000 over the past 12 months in terms of people who run fleet cars. We will be keeping in contact with them, making sure they know we are available and then finding out if there are opportunities and passing those on.”
The diesel share has plummeted, though. The fuel made up as much as 74% of Volvo’s sales in 2017, but this has dropped to just 46% this year.
The majority of the sales are now petrol cars, with plug-in hybrids accounting for 4.7% in 2019. In 2020 the PHEV share will go up to as much as 25%, said Galvin, as he expects the UK demand for PHEVs to be slightly higher than other markets, where it will be around 20%.