Volvo invests in online marketplace carwow to boost digital car sales
28 April 2022
Aiming to improve its digital sales, Volvo Cars has taken a minority stake in online car marketplace carwow. The investment was made through the carmaker’s venture arm, Volvo Cars Tech Fund. Financial details were not disclosed.
The Sweden-based car manufacturer is hoping to gain greater insight into online car sales, customer acquisition, and content creation, including on social media. It said that the investment would help the company shift its focus towards online and direct customer relationships.
Volvo Cars and carwow are known partners, with the companies already collaborating on Volvo subscription services, as well as increasing traffic and sales leads to the carmaker and its retail partners. The investment is taking the partnership to the next level as Volvo is ramping up its online sales strategy, which it bases on consumer behaviours, industry trends, and its aim to be an all-electric brand by 2030.
Carmakers, especially premium brands, view online car sales as a lucrative opportunity to build direct relationships with customers, which also helps to improve marketing and new-car trends by analysing what consumers want.
Growing retail partnerships
Spurred on by the pandemic when dealerships were closed for weeks, if not months, consumers are progressively turning to digital car sales to buy a vehicle. Carwow has done particularly well in the past few years, recording steady growth.
The UK-headquartered car marketplace has been able to establish itself as a leading platform for buying new cars in Europe since its foundation in 2009. Customers also use the site to sell their vehicles. The company ranks among the market leaders in the UK, Germany, and Spain for online sales of new cars.
‘Third-party marketplaces play a key role in any consumer industry, which includes the competitive landscape of Volvo Cars,’ said Lex Kerssemakers, chief commercial officer at Volvo Cars.
‘We were one of the first car manufacturers committed to shift to online sales and through this strategic partnership, we will learn and gain insights into online buying behaviour. Our collaboration with carwow will help us and our retail partners grow volumes and reach our target of selling around half of our volume online by 2025,’ he added.
Volvo has set itself clear targets to become one of the leading manufacturers of premium electric vehicles (EVs), a fast-growing segment. Building direct consumer relationships is key to its online sales strategy, with the carmaker eager to create a simple digital experience for consumers. At the heart of this lie transparent pricing and product information, as well as clarity on delivery times.
‘Volvo Cars and carwow have the same ambitions: to make buying a car online easy and seamless and help consumers switch to electric cars,’ said Alexander Petrofski, head of the Volvo Cars Tech Fund. ‘Our investment in carwow is a good example of how the Volvo Cars Tech Fund aims to support the overall strategic direction of the company.’
The partnership will also allow Volvo to increase its visibility to customers. Carwow’s automotive YouTube channel has more than 6.95 million subscribers compared to Volvo’s 185,000 followers. As a big player in the media, carwow could help Volvo expand its online reach through strategic collaborations.
News of the carwow investment follow a recent announcement by Volvo, which earlier this month invested in StoreDot, a company developing extreme fast-charging battery technology for EVs.