Volvo to end dealer agreements with Bilia as online push intensifies

STOCKHOLM -- Swedish car dealership chain Bilia has received notice of termination for its dealer agreements with Volvo Cars in Sweden and Norway, it said late on Monday.

Volvo is trying to boost online sales, which it put additional emphasis on during the pandemic, to maintain volumes despite widespread temporary closures of dealerships around the world to slow the spread of COVID-19. Volvo aims to more than double global online sales to 50 percent by 2025.

The termination, which has a notice period of two years, covers both Bilia's car sales and services business for Volvo models.

Bilia, a leading Nordic dealership with about 140 facilities mostly in Sweden and Norway, said its turnover for sales of new Volvo cars in Sweden and Norway was about 6.4 billion Swedish crowns ($743 million) in 2019, compared with 29.5 billion crowns in total revenue for the group.

Bilia is No. 11 on the annual ranking of Europe's largest dealer groups, figures from analyst ICDP show.

"The car business is subject to a global transformation and we are convinced that Bilia will continue to play a central role also in the future," Bilia CEO Per Avander said in a statement.

Bilia said sales of used cars were not covered by the dealer agreements and hence not affected by the termination.

In September, Volvo announced it was buying Upplands Motor, another major Swedish dealership, and that it planned a full takeover of retailer Bra Bil, seeking to merge the two businesses with its own dealership, Volvo Bil.

Volvo is planning to use the merged businesses in Sweden to shape its future car sales and strengthen its direct contact with customers as they move increasingly online.