Volvo Car South Africa (VCSA) is closing 12 out of its 19 dealers as part of a long-term brand realignment in the domestic market.
It recently confirmed to TopAuto that over the course of 2024, Volvo bigwigs visited all dealerships across South Africa to evaluate various aspects important to the brand.
They subsequently chose to shutter 12 of these locations “based on those aspects as well as the sales potential for each location,” leaving only seven handpicked outlets to continue operations.
The remaining retailers will be located in Gauteng, KwaZulu-Natal, and the Western Cape, the economic hubs of the country.
Depending on the area, they will be operated by one of the following dealer groups:
- CMH
- SMH Bedfordview
- Tom Campher Motors
- Rola Motors Somerset West
The company added, however, that these may not be the only Volvo dealers in South Africa in perpetuity.
Despite the impending shutdowns, Volvo continuously evaluates the potential for further expansions and it may add locations to its network again should an attractive enough opportunity arise.
It also emphasised that customers will remain unaffected by the outlet closures.
“There will be no effect for customers. Currently warranty and service plans remain active and we will offer solutions to provide the best service possible to our customers,” the Swedish marque said.
“A dedicated channel exists in our customer care team to handle their needs.”
The future of Volvo
It remains unclear why Volvo has made the seemingly extreme decision to say goodbye to over 60% of its dealers in South Africa.
The company hasn’t been particularly affected by the adverse market conditions and changing buyer preferences experienced since the Covid-19 pandemic, with its sales remaining relatively consistent over the last five years.
According to Naamsa The Automotive Business Council, annual sales of Volvo passenger cars ranged between 1,168 units and 1,431 units from 2020 to 2024, proving rather stable in a turmoiled market and ringing no obvious alarm bells.
It’s motivations may therefore be driven by the future, rather than the past, if we read between the lines.
It appears Volvo is setting itself up to be the leader in the electric vehicle (EV) space in South Africa in hopes that adoption rates start rising in the near future.
It achieved marked success with the introduction of the EX30 in 2023, which went on to become one of the country’s top-selling EVs in both the new and used sectors.
VCSA also mentioned the EX30 when we asked it about the dealer closures, hinting at the importance it places on the new-generation EV.
“We are fully committed to the South African market,” it said.
“This commitment is evident in the continued investment in electrified mobility and the introduction of new models. In 2024, the recently launched Volvo EX30 was the best-selling EV, helping the brand consolidate as the leader in EVs in South Africa.”
It recently launched the EX90 in the country with which it aims to corner the luxury EV segment.
Over the last few years, Volvo also made it abundantly clear that its future is electric.
“Instead of investing in a shrinking business, we choose to invest in the future – electric and online,” the company proudly announced in 2021.
To that end, it aims to go entirely electric by 2030 and phase out all cars with internal combustion engines from its line-up, including hybrids.
Fanning the flames is the fact that VCSA chose to keep dealerships in areas where EV adoption rates are the highest in South Africa and the supporting infrastructure the most freely available – the economic centres of Johannesburg, Cape Town, and Durban.
As we can see from the map of charging stations below, these cities have the highest concentration of plugs for EVs:
Volvo is also one of the first and thus far only automakers in South Africa to pioneer an online shop for its cars.
Launched in 2021, the My.Volvo online store allows consumers to purchase or rent just about any Volvo-badged vehicle and get it delivered to their doorstep.
With its sights set on what lies ahead, and the challenges that will accompany that goal, Volvo likely reached the conclusion that there’s really not much of a reason to have retail locations in areas where its new products probably won’t perform, as they’ll neither be doing the sales department nor the accountants any favours.
And, for the handful of consumers who do not live near these handpicked Volvo dealers, it still provides an online store should they be itching for a Swedish ride and the after-sales support that goes along with that.
Judging from VCSA’s feedback, however, it doesn’t sound like it has that many clients outside of Johannesburg, Cape Town, and Durban anyway.
Rather surprisingly, the company said it doesn’t expect the closure of over half its dealer network to affect its sales.
“We are expecting to keep the same volume for 2025 as we had in 2024,” said VCSA.
Logically, this tells you that the vast majority of its customers interact with the brand through one of the seven dealers that will remain afloat.
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