Matthew Haiken, Volvo Retail Advisory Board chairman, said he is concerned that dealer unrest with the subscription program is escalating.
"With California opening it up, now other states are going to jump on the bandwagon and it's going to make it that much more challenging" for Volvo to launch a revised version of the program, said Haiken, dealer principal of Prestige Auto Group in East Hanover, N.J. "I believe we need to be innovative and try new things, but I am 100 percent for the manufacturers following state laws, and they should be held accountable."
Volvo Car USA CEO Anders Gustafsson is expected to discuss the concerns when he meets with retailers at the NADA Show this week in San Francisco.
Volvo said it will defend the program before the New Motor Vehicle Board. "We believe it is consistent with California law and beneficial not only for our California retailers, but also for our California retail consumers," a spokesman said.
Multiple states are studying subscription models and their implications for local dealership franchise laws and state revenue streams. California, Indiana and New Jersey are looking at legislating how vehicle subscriptions are handled.
The Volvo complaint escalates tensions between Volvo and its California retailers, which surfaced last spring when the dealer association sent letters to Volvo USA expressing concerns.
Volvo told Automotive News last month it plans to revise the subscription program to allay dealer concerns but declined to elaborate on the tweaks.
The California association was informed that Care By Volvo 2.0 would be introduced sometime in 2019, association President Brian Maas said.
"But Volvo didn't say what 2.0 would have, didn't say how 2.0 would fix 1.0, and for us, that's woefully inadequate," he said. "Volvo is violating California law, and we felt we had to call this out."
Haiken said he believes dealers in as many as six other states are considering actions similar to the California association's.
Peter Sander, president of the Illinois Automobile Dealers Association, said Volvo dealers there are considering filing a complaint about the subscription program with the state Motor Vehicle Review Board.
"The dealers feel the subscription program is a potential conflict with their franchise agreement," Sander said.
"It looks like the manufacturer is trying to compete with its own franchised dealers."
