Volvo hit by rush of dealer shutdowns

Volvo’s Australian dealer network has been hit by a sudden exodus with up to six showrooms closed in the last three months, all in major centres like Sydney, Melbourne and the Gold Coast.

While six doesn’t sound like a huge number, the Australian Automotive Dealer Association (AADA) publication, 2025 Dealernomics, reports Volvo was represented by 35 dealerships nationwide before the exodus began.

That means a 17 per cent reduction since the start of December 2024.

The closures have a direct impact on Volvo owners as Volvo Car Australia (VCA), the factory-owned local distributor, no longer recognises at least some of the former dealers as authorised service representatives.

That means customers have to travel further for servicing, which is included in the up-front purchase price of many Volvo models.

The six dealerships are owned by some of Australia’s biggest dealer groups including Eagers Automotive, which has handed back at least one franchise.

The dealerships closed include Liverpool and Castle Hill in Sydney, Waverley in Melbourne, Southport on the Gold Coast and Gosford on the NSW Central Coast.

Profitability concerns are understood to be at the heart of the issue for the dealer groups involved.

Quoted on the condition of anonymity, one former Volo dealer principal told carsales: “Too much stock, not enough enquiry and a brand demanding high levels of expense to serve customers is difficult to make viable in this market with a lack of support from Volvo themselves.”

Volvo sales slumped 20 per cent from 11,128 in 2023 to 8898 in 2024.

According to AADA Dealernomics, that’s an average 254 sales per franchise per annum.

Luxury rival BMW’s 49 dealers averages 538 sales each and Audi’s 40 dealers average 383 sales.

In a public statement announcing the closure of its Gold Coast Volvo dealership last month after 23 years in operation, the Peter Warren Group blamed a “dynamic automotive landscape”.

The nearest authorised service centre for its former customers is in the Brisbane suburb of Logan, about an hour away.

Volvo Car Australia did not answer specific questions from carsales about the dealer exodus. In an email, spokesman Greg Bosnich said it was not appropriate for VCA to comment on their commercial decisions.

“We can however state that decisions regarding representations of Volvo Cars are always done on a mutual front,” he wrote.

“Volvo Cars places high emphasis on customer satisfaction and we have a retailer network able to provide Volvo customers with sales, servicing and parts nationally,

“We are in talks with our current partners regarding the Gold Coast and the other PMAs [primary market area], we either have ample representation or our current partners will operate these territories with a Hub and Spoke strategy, e.g. Volvo Cars Melbourne and a further service outlet in Essendon.”

AADA chief executive James Voortman told carsales the Volvo exodus served as a warning to all brands.

“Dealers have more choice than ever in terms of which manufacturers they partner with and they are less willing to stick it out with an unprofitable brand,” he said.

“Retailers are facing significant cost pressures, especially with interest rates leading to very high floorplan finance costs.

“It’s more important than ever that manufacturers work with their dealers to ensure they are not overstocked.”

This is the second significant public setback Volvo has hit in Australia in the last few months.

As first reported by carsales in October 2024, VCA boss Stephen Connor confirmed the reversal of its 2022 announcement it was going all-EV by 2026.

That was ahead of Volvo’s global 2030 EV target which has since been walked back into the 2030s, and VCA has followed suit.

The aggressive EV switch and the accompanying investment it required caused angst in the Australian dealer body, something Connor acknowledged at the time.

“The dealers will be receptive to this, I think more importantly they will like we are listening to the market and consumers,” Connor said.

Join the conversation at our Facebook page
Or email us at editor@carsales.com.au