Volvo Coronavirus Financial Re...

Jack R. Nerad | April 10, 2020

On March 3, 2020, Volvo Car USA announced robust sales in the month of February, the best for the month since 2007. With that 18.2% year-over-year gain compared to the sales total from February 2019, Volvo celebrated its 14th straight month of annual growth and 2020 year-to-date sales up 12.1%. The company’s lineup of SUVs led the charge with the updated XC90 up 21.7% versus February 2019 and the remarkably popular XC40 up 64% year-over-year.

Volvo Coronavirus Financial Relief and New Car Incentives

Then in mid-March, the coronavirus reared its ugly head. In many states and localities, businesses were shut down and citizens were strongly encouraged to stay home. These measures had a devastating effect on overall vehicle sales and Volvo didn't avoid the pain. The brand's sales fell 42.7% for the month of March, a decline dramatic enough to turn what previously had been a strong sales increase into an 11.7% year-over-year decline for the quarter.

In the face of the economic and health crisis, Volvo Car USA is offering coronavirus financial relief to existing customers and new car incentives in a bid to gain new customers and regain the momentum it had earlier in the year. Here are the details.

Volvo Customer Relief Programs - Find the best deals!

The COVID-19 pandemic and the efforts to limit its spread and severity led to the immediate near-shutdown of several major U.S. industries, resulting in sudden unemployment for millions of workers. Many of them are now wondering if they will be able to make their car loan or lease payments.

Volvo owners and lessees who find themselves in that awkward position can get relief from Volvo Car Financial Services (VCFS). Payment extensions are available to VCFS customers impacted by public health concerns based on their individual circumstances. More information is available online at Volvo Car Financial Services.

Additionally, customers with leases within 30 days of expiring can extend their current VCFS leases for up to 60 days as long as they keep insurance in place. To request a lease extension, lessees are urged to access their accounts online at Volvo Car Financial Services. Otherwise, they can return the car as scheduled. Lessees seeking to return their leased vehicle should contact their local Volvo dealer using the Volvo Valet app to coordinate drop-off or pickup.

Volvo owners and lessees who did not finance their vehicle or obtain their lease through Volvo Car Financial Services and who need assistance should contact their lender or leasing company and inform them of their situation. Many banks and auto finance companies are offering various forms of payment relief, and discussing the situation with them is valuable in understanding the options available.

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Volvo New Car Incentives - Find the best deals!

In line with what most luxury brands are doing in response to the coronavirus crisis, Volvo has not announced an overarching sales promotion. Instead, it is continuing to offer a variety of regional and local incentives. For example, in many areas of the country consumers can buy an XC90 T5 Momentum with a loan rate of 2.99% (APR) for a term of up to 60 months. The offer also includes up to $3,500 in allowances. The same vehicle can be leased for $499 for 36 months with $4,899 cash due at signing.

In addition, Volvo offers vehicle "subscriptions" to several of its most popular models. For those interested in a subscription to the XC90, a T6 all-wheel-drive version of the SUV costs $800 per month for two years with no money due at signing. Plus, Volvo will pay for the first 30 days of the subscription, which includes insurance, maintenance and some "wear-and-tear." Subscribers also have the option to choose a new Volvo vehicle after 12 months. Volvo's subscription service was introduced in 2017 and is currently available in 42 states.

Similar purchase, lease, and subscription offers are available for most Volvo models, including the popular XC60 and XC40 crossover SUVs.

The Volvo Car website and Volvo Concierge offer shoppers a bridge to dealers, helping them get familiar with the vehicles before introducing them to their local retailer. Volvo Car is using virtual product walkarounds, augmented reality, and Google Lens to reach potential customers who are now sheltering at home, while Volvo retailers are using FaceTime for live walk-arounds and scheduling service pickup and delivery using Volvo Valet.

Volvo Factory Closures - Find the best deals!

Volvo Cars is owned by Zhejiang Geely Holding of China, which acquired the Swedish automaker in 2010. Volvo Cars has around 40,000 full-time employees and manufactures cars and SUVs in Sweden, Belgium, China, Malaysia, and the United States. Volvo Cars' head office, product development, marketing, and administration functions are mainly located in Gothenburg, Sweden.

A Volvo Car USA spokesperson told J.D. Power, "We are now planning for a restart of our car plants in Sweden and Belgium on April 20 while the restart of our Charleston [South Carolina} plant is planned for May 4. All our China operations are running and both production and demand are approaching normal levels."

Volvo's North American staff is working from home because its offices in New Jersey, California and South Carolina have been closed by state orders. Many Volvo dealers in states that have stay-at-home restrictions are delivering new cars to customers at their homes, and nearly all retailers are open for service and repair operations.

Volvo Economic Outlook & Sales Forecast - Find the best deals!

J.D. Power believes vehicle sales for the rest of 2020 will be heavily influenced by auto manufacturers' ability to build vehicles and by incentive offers to consumers. The effectiveness and speed of government stimulus packages will also affect recovery.

Domestic and global vehicle manufacturing is currently at a standstill with most U.S. factories closed for April. If production is halted for two months, that 2.0 to 2.5 million-car shortfall in production could lead to a similar drop in vehicle sales for the year. When asked about the effects of the coronavirus situation on its potential sales results, a Volvo spokesperson said, "We cannot speculate on future sales."

With severe restrictions on consumer movement and sudden high unemployment, the J.D. Power outlook for retail sales in April is a decline of 65-79% from its pre-virus forecast and far worse than the March 2020 drop. At this time, the J.D. Power calendar-year 2020 outlook for total vehicle sales is in the range of 12.2 to 14.9 million units.

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