This car brand will close over 60% of its dealerships in SA
A major car brand has confirmed that it will be closing 60% of its car dealerships across South Africa.
Volvo Cars South Africa (VCSA) has confirmed that it will proceed with plans to reduce the number of dealerships in the country.
According to BusinessTech, this will see a reduction in the luxury car brand's dealerships from 19 to just seven.
VCSA announced that this decision is part of a strategic realignment which aims to align the brand with global trends while also ensuring a better overall customer experience.
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The car brand also stated that this forms part of its commitment to advance electrification, digitalisation, and sustainability.
The reduction in dealerships will ensure that Volvo prioritises premium and consistent service with strategically located, high-performing dealers.
Unfortunately, this decision has not come without backlash, particularly from the Motor Industry Staff Association (MISA), which represents more than 66% of Volvo’s dealership employees.
According to MISA, the company did not consult the union beforehand, which has led to panic among its more than 700 members.
Volvo Cars South Africa reportedly told BusinessTech that no employees are expected to lose their jobs.
"We are working with the affected dealers to mitigate negative effects on jobs, even though they are not Volvo employees, and we have no obligation to do so," said a VCSA spokesperson.
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Volvo vehicles will still be available through the following dealership groups: CMH, SMH Bedfordview, Tom Campher Motors, and Rola Motors Somerset West.
The remaining dealerships will be located in seven different areas across Gauteng, KwaZulu-Natal, and the Western Cape.
A nationwide evaluation was conducted to determine which dealerships should remain open, based on various factors – most importantly, sales potential.
"The decision on which dealerships to close was based on those aspects as well as the sales potential for each location," said VCSA.
The full restructuring is set to be completed by the second quarter of 2025.
VCSA confirmed that it is engaging with affected dealers to discuss potential financial losses.
"We will conduct a fair agreement with our dealer network that might include compensation where applicable," the company said.
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