Volvo to launch online car sales in global marketing strategy shift

Volvo Car Corp said it will start selling vehicles online as it rolls out new models to compete with German luxury rivals such as BMW.

The Swedish carmaker, controlled by Zhejiang Geely Holding Group, will gradually introduce Web sales and spend more on digital advertising, it said as it outlined changes to its global marketing strategy on Monday.

Volvo raised its 2014 sales goal in August as it launched a revamped XC90 crossover, the first vehicle developed under Geely's ownership.

"The plan is to have all our car lines in all our markets offered digitally," Volvo sales chief Alain Visser said in an interview.

Few manufacturers have tried selling directly online. A notable exception is Tesla, whose electric car sales have cut out traditional dealers, leading to conflict and effective exclusion from parts of the US.

But Volvo has assured its 2,000 global dealerships, half of which are in Europe, that it has no such plans.

"If you say the word e-commerce, initially dealers get nervous," Visser said.

"We don't see a car distribution network without dealers in the foreseeable future," he said, adding that vehicles sold online "will still pass through the dealer network" for delivery.

The Swedish carmaker plans to withdraw from all but one motor show per year in each of three regions - Europe, North America and Asia - and stage its own global event instead.

Volvo also said it would not follow rivals into city-center boutique dealerships of the kind increasingly used by BMW, Mercedes-Benz and Audi.

"We're a different brand with limited financial means," Visser said. "We don't believe in building these big palaces."

Some 80 percent of Volvo customers already shop online for other goods, the sales chief added, and research suggests many will do the same for cars in future.

But some analysts such as Stuart Pearson of Exane BNP Paribas remain skeptical, citing weak orders from experimental online sales of BMW's i8 hybrid sports car.

"BMW has tried it in Germany, but they really haven't had a huge amount of volume," Pearson said. "People still want to go into dealers."