Volvo Australia does U-turn on fixed prices for electric cars

EXCLUSIVE

Electric-car buyers looking for a deal could be the winners of a major backflip by Volvo, which has dramatically ditched its controversial plan to sell electric cars in Australia at non-negotiable, fixed prices.

After less than two years experimenting with the new business model, the Chinese-owned Swedish car-maker this week informed its Australian dealer network that buyers will now be able to negotiate prices on its electric-vehicle range.

Although sales of Volvo electric cars have more than tripled in Australia so far this year compared to the same period last year, the company is overstocked and struggling to move metal – even as rival brands report high demand and long wait times for electric vehicles.

Confidential plans shared this week with Volvo dealers – a copy of which has been obtained by Drive – say local showrooms will initially be loaded up with a large number of unsold electric vehicles, ahead of more supply allocations in the following months.

The backflip means customers who want an electric car will be in a better position to drive a bargain if they want an electric Volvo.

For the past two years, Volvo Australia has taken a hardline stance on the prices for its electric cars – and many buyers have shopped elsewhere.

The Volvo bulletin said the dealer network will now be able to "sell from pipeline stock" with new cars "to be wholesaled ASAP" to "reduce holding costs and delivery times".

Volvo's decision to walk away from its experiment with non-negotiable, fixed prices comes as Honda sales hit record lows after making the same switch in Australia two years ago.

Meantime, Mercedes-Benz, which has also switched to non-negotiable fixed prices in Australia, has found itself in the middle of a Federal Court battle after a large group of dealers challenged the move to the new business model.

A statement from Volvo Cars Australia about the switch back to the traditional dealer sales model said: "Our retail business partners (dealers) have ... very much expressed to us that this was their preferred method.

"We are now opening up our pipeline and ordering process so that our retailers can order their own stock and sell from pipeline ... up to six months in advance."

For now, it is unclear what the U-turn on fixed pricing means for Volvo Australia's controversial decision to axe all petrol models locally by the end of 2025 – four years ahead of Volvo's global plan to go fully electric.

A number of Volvo dealers in Australia have expressed concern about the decision to axe popular petrol-powered models such as the Volvo XC60 and Volvo XC90 ahead of schedule.

They say killing these petrol-powered family cars five years before Europe is a premature move, because not all Australian buyers are ready to switch to electric power.