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Volvo Cars to terminate dealer agreements with Bilia

·1-min read
FILE PHOTO: IAA truck show in Hanover

STOCKHOLM (Reuters) - 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.

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 around 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 to 29.5 billion in total for the group.

"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.

Volvo is trying to boost online sales, which it says have accelerated during the pandemic, and aims to sell 50% of its global volume online by 2025.

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 as a pilot for shaping its future car sales and strengthen its direct contact with customers as they move increasingly online.

(Reporting by Johannes Hellstrom; editing by Niklas Pollard)