Volvo Cars has taken a strategic minority stake in online auto marketplace Carwow through the Volvo Cars Tech Fund, its venture capital arm. The manufacturer said its aim was to gain insights in areas such as online sales, customer acquisition and content creation, which will help its shift towards online and direct customer relationships. Its online sales strategy is based on changing consumer behaviours and industry trends, in combination with its ambition to be a leading pure electric car brand by 2030.
James Hind, founder and CEO of Carwow (pictured) stated: “This new agreement underlines Volvo’s belief that third-party marketplaces are essential to the future of motor retail. It also signals confidence in the key role that Carwow can play in direct sales, and our ability to support OEMs and retail partners as part of an agency model.
“We already had a strong and very productive working relationship with Volvo in the UK and overseas, and it’s great to see another OEM join Mercedes-Benz in securing a minority investment in Carwow to build on a successful collaboration. This new funding will enable us to accelerate our own investments in new ecommerce solutions and in our direct sales offering.”
Volvo moves online
Volvo Cars said the equity investment, which is for an undisclosed amount, is the next step in its existing partnership with Carwow, which includes collaborations on Volvo Cars’ subscription service as well as driving traffic and sales leads to Volvo Cars and its retail partners.
“Third-party marketplaces play a key role in any consumer industry, which includes the competitive landscape of Volvo Cars,” said Lex Kerssemakers, chief commercial officer at Volvo Cars. “We were one of the first car manufacturers committed to shift to online sales and through this strategic partnership, we will learn and gain insights into online buying behaviour. Our collaboration with Carwow will help us and our retail partners grow volumes and reach our target of selling around half of our volume online by 2025.”
The company’s focus on online sales and direct customer relationships includes creating a simple and hassle-free experience for ordering Volvo products and services, with transparent pricing and product information, as well as clarity on delivery times through its online store on volvocars.com.
“Volvo Cars and Carwow have the same ambitions: to make buying a car online easy and seamless and help consumers switch to electric cars,” said Alexander Petrofski, head of the Volvo Cars Tech Fund. “Our investment in Carwow is a good example of how the Volvo Cars Tech Fund aims to support the overall strategic direction of the company.”
Carwow is headquartered in London and employs over 400 people across Europe. The company has experienced considerable growth in recent years and is now one of the market leaders in the UK, Germany and Spain for online sales of new cars. Having started life as a reviews aggregator, it has also become one of the most influential names in consumer car media. Its automotive channel on YouTube has over six million subscribers and is growing.