A direct sales model means that you can buy a car straight from the company instead of going through a dealership. This can make the buying process easier and more straightforward.
Transparent pricing means that the price you see is the price you pay, with no surprises or extra fees added later. It makes buying a car simpler and fairer.
Omni-channel means you can shop for a car in different ways, like online or in a store, and have a consistent experience no matter how you choose to buy.
A plug-in car grant is money given by the government to help people buy electric cars. It makes these cars cheaper to encourage more people to use them.
The £1,500 grant is money that Volvo is giving to help people buy their cars. It's to make it easier for customers since they can't get some government help.
BEV means Battery Electric Vehicle, which is a car that runs only on electricity and doesn't use gas at all. These cars are becoming more popular as people look for cleaner options.
'Range' means how far an electric car can go before it needs to be charged again. A longer range is better because it means you can drive further without worrying about running out of power.
The Dodge Journey is a roomy SUV that can fit a lot of people and stuff, making it good for families. It's not the newest or fastest option out there, but it's usually cheaper, which is why some people like it.
The Volvo XC60 is a fancy SUV that's great for families and has a lot of safety features to keep everyone safe. It's comfortable to drive and has a nice look, which is why people like to talk about it.
Car
Volvo EXC60
The Volvo EXC60 is an electric SUV that is based on the XC60, which is a popular family car. It's important for the company as they move towards making more electric vehicles.
A mid-size SUV is a type of car that is bigger than a small SUV but smaller than a large one. It's great for families because it has more room for passengers and luggage.
Safety in cars means how well they protect people inside during accidents and how they help avoid crashes. Some car brands, like Volvo, are especially known for their focus on safety.
Welcome to another episode of AutoCar Meets, our regular podcast in which we chat to some
of the car industry's high flyers.
This time we're talking with Nicole Malillo-Shaw, Volvo UK's managing director.
Hi Nicole, thanks for your time today.
How are you?
I'm good, thank you.
Hi Rachel.
Firstly, let's talk about recent success.
September has been the most successful ever for Volvo in the UK.
Why is that?
So firstly, over the moon with our September performance, in fact over the moon with our
year to day performance, what it comes down to really is since we've moved to the direct
consumer model, we've launched a fantastic new product in the X30.
We've also really got to grips with our retail journey, so our retail channel has grown and
we've got some momentum in terms of how to go to market with our consumers, how to make
sure our brand is appealing to them.
And yeah, it's laddered up from a fantastic start to the year with a record breaking Q1
and then coming out of Q2 with some really strong building of order take, we've then
just, as you say, hit our all time high in September, so absolutely over the moon.
Retail is a really important channel for us, it really, that end user, really demonstrates
that we're hitting a key area that we need to for our business, so more consumers are
choosing our brand as well, so our market share has increased to 3.2 year to date and
looking forward to a strong second hand as well.
And you mentioned the EX30, I mean other than that car, which models are performing the
best for you?
So, XT40 is our biggest seller by far, that's a really important component of our growth.
But EX30, we're really seeing that it's gathered momentum over the last few months as I said,
so we're actually now seeing that it's doubled in terms of order take, so really important
particularly with our ambition for electrification and what we're moving to, so we're seeing
more and more on the road as well, which is great.
Volvo has built on its direct sales model to sit alongside the traditional sort of dealer
models, can you explain briefly how it works and what your plans are for it in the future?
So yes, the direct consumer model is something that we launched in June 2023, really in partnership
with our network and VCC and VZUK teams, we've really now transformed our business and it's
more than stable, we're really flourishing in this model now, so the whole point of it
is to have a transparent pricing for consumers, get away from some of that legacy negativity
around having to haggle over price, so we've really moved the dial when it comes to that
and we're also getting better at consumer closeness, which is critical as well, so our consumers
are able to enjoy the experience more, this word omni-channel that we've banned around
a lot, being able to shop at retailers or online, excuse me, or everything in between,
so we've really embraced that, but really now, to answer your question, it's about taking
it to the next level and making sure that we are able to leverage that data with our
consumers and bring that relationship to life so that we can really really stand here and
say that we've made meaningful change in the automotive industry.
Direct sales models have been a bit contentious across several brands in the last few years.
How have you continued to foster strong dealer relationships despite this changing face of
the car market?
I think the first thing is we've worked very closely with them because this is something
that needs to be done in partnership. If you don't do a partnership, then the consumer
will fall down the middle, so we've absolutely worked well in advance of the launch, probably
about 18 months or two years in partnership with our key network partners to deliver something
that is relevant and meaningful and that conversation hasn't stopped, so we're still very much closely
in touch with them around how to optimise the model and how to make it better. I think
that's the first thing. If you look at the dealer sentiment or the retailer sentiment,
it's very very positive around how we've done this together and what it means for them as
well. At the end of the day, we all want to make it better for the consumer and the customers
in front of the retailer quite often, so it's important that that was developed in partnership.
There's been quite a few issues with Volvo software. The EX90 was delayed and we know
some customer complaints. I know that's something you've been quick to address. Can you explain
what the situation is now?
Yes, so EX90 is by far our most technologically advanced product. We're really proud of what
it is and what we've achieved with it. I guess we've learnt a lot along the way. We've taken
those learnings as we move forward in our electrification journey because we are committed
to electrification. We are committed to technology and it's important that we can continue to evolve
on that. As we launch model year 26, there is a significant software update and we're really
seeing now that step change, which is delighting customers, will delight customers as it lands,
but for me personally, it's a car I drive every day. I really enjoy it. It's another level
and I think that's the difference with having a product that's been built from the software
out rather than trying to reverse engineer. There's a lot to come and I think where we've
got to as a business is really feeling that in this new era, it's about the car evolving
through these software updates and we work really hard to make sure that they're meaningful
and customers are getting a better product with every update that comes along.
And so on that, more broadly speaking, with cars like the EX30 and the EX90, have you had to do
quite a big education piece so your customers are getting the best from this software?
In terms of making sure they understand how to use it, our retailers have gone through a
lot of training because it is new to everybody, new to our retailers, new to us. What we found
though is when they have really understood it, they're able to add value quite quickly
and we've seen that because the profile of consumers embracing the EX30, for example,
is widespread. We've had people 60 plus as well as the younger demographic as well so
we've really made sure it's meaningful across the board and importantly easy to use.
You mentioned your commitment to electrification. Obviously, there was the recent introduction of
the new plug-in car grant. The EX30 wasn't eligible because it's built in China and I know
that you've launched your own £1,500 grant. How has that played out and how much a challenge
has it been to compete against cars that are eligible? I think it's important to say that we
are supportive of the electrification movement. We're supportive of the government's ambition
where obviously we need to have conversations around how we go about that and how we make sure
that the support comes back to Volvo. But you're right, we're not eligible because of the way that
the government has put the principles in. What we decided to do is make sure that the customer,
the consumer, was not at a disadvantage. What we've done is made sure that that £1,500 that we
believe we would have been eligible for is baked into the offer. Without waiting to see if there
was any eligibility or waiting to see if we would get the funding, we did that quite quickly
because it's important that we lean in as a key brand supportive of sustainability and
electrification to do that. From the outset, we went quite loud and proud with that and we've
seen EX30 grow as a result. We saw immediately the interest level from the grant noise on our
website and then we're able to convert quite quickly as well. It's all going in the right
direction and for the right reasons. On that, there's a general consensus that the electric car
market is softening. Is that something you've seen at Volvo in your sales?
Not at all. We've actually seen that the electric of the Bev area is growing.
The appetite is growing. I think that there's a whole population of customers that are in that
camp hall now or next one. Shall I have one more ice car? Our job is to make sure that they have
the information to choose the right car for them. We have got a balanced portfolio. However,
the most innovative products and the ones that we believe are the best cars are electrified.
To the point about our network and our teams and our e-commerce team, etc., they're all geared
behind making sure there's nothing we're holding on from choosing an electric car. I suppose if
they do choose a hybrid or an ice car, it's not because we haven't given them the information
it would give them that comfort. I think electrification is definitely the future.
We are growing year on year. The EX30 has been a key pillar to that and we're going to continue
to launch products in that space as well. There's a couple of big cars coming up for you. The Flagship
ES90 and the EX60. Let's start with the ES90. How do you plan to position a car at that level of
the market and where do you expect your Conquest sales to come from?
ES90, I try not to be too boxed in on this because we all know consumers come based on a car they
like, but I think it's inevitably a fleet car because of the profile and the segment it operates
in. I also think when we look at consumers and some of their concerns or questions, we know range
has been won. The ES90 will have over 430 miles at full charge. That's definitely going to appeal
to those that may have that kind of nervousness. We are going to launch it at full pelt and I think
there'll be a big take-up from fleet, but I'm also interested to see where else we might capture
interest from. What sort of person do you think is going to buy a car like that?
What we've looked at is definitely someone who's interested in electrification,
but also when you're doing longer miles, if that is a question mark, that being over 430,
it's got to eradicate a lot of concerns. When I've spoken to Network about this, the first thing is,
okay, that's another jump on. That's something now where it is not going to be, you can definitely
get from A to B without having to think about charging. It takes that conversation away. I think
when you're at a lower end, you're thinking about charging along the way, whereas when you get to
400 plus miles, you can definitely do a journey or a return journey in that time. Also, it's not an
SUV, which is important as well because we've got a really good lineup in the SUV space,
so it appeals to a different consumer as well. Yeah, I suppose that's what I was thinking in
terms of it being a slightly different segment. As you say, people buy cars and moving between
segments, but it's not as easy to position for people as your XC60 or your EXC60.
I think it's important that we are diverse in our offering, so that's one of the things that's
great is we know that there is a segment for that. I actually think the electrification element of
that style of car will bring in an additional consumer as well. Then the EXC60, the electric
version of your best-selling XC60, which I see them everywhere. Lots of my friends have them.
How crucial is a car like that to EV transition? EXC60 is absolutely pivotal to our growth,
absolutely pivotal. We've just obviously done the refresh of the XC60. We've had the
fantastic reviews from Joan Clarkson, which has gone live just recently. We really see that that
is a fantastic mid-SUV, so it's a really go-to family car. Launching that in an electrified
space with the software, with the technology, with the extra range, all of those things,
it's going to be a key building block for us as a total company, but particularly for the UK.
So we're looking forward to launching that. When does it land? It lands Q4 next year.
Okay, so late next year. We will be doing the launch in Q1, so that's fully on track.
Traditionally, Volvo has been seen as a left-field alternative to Audi, BMW, Merck.
Things have moved on a lot in the last few years for everyone, but at this point,
how do you differentiate yourself against those obvious rivals?
Yeah, it's a good question. The competitive environment is just absolutely wild at the
moment. Not only have we got traditional, as you mentioned. We've also got more Chinese entrants
coming in. Consumers have more choice than ever, which is challenging, but it's also great because
it keeps pushing. It keeps making sure that as manufacturers, you're able to really think about
the consumer first because you have to fight for every sale. So I think that's a really good thing.
One of the things that we do and we're really proud to do is lean into our credentials and what
we stand for, because I think that means that if we are standing for that humble, but strong,
responsible brand that is rooted in safety, that gives us a point of difference not only to the
traditional manufacturers, but also to the Chinese entrants as well. So across the board, we just
keep relentlessly doing what we do best, making sure we're clear on what we stand out for.
And that is really resonating. We've seen that our willingness to pay and brand desire is
increasing, which is really important, particularly as a, I don't know if I should say X market here,
but somebody who's worked in that space, knowing that people really see why you would pay more for
a premium brand like Volvo, as you say, wasn't always the case. Now we're able to really justify
that and we're not moving away from those credentials. So we're very proud to talk about
safety, even when we're moving into electrification and new news, still safety first.
The safety piece, it's very interesting because I feel like I've known that in Volvo for as long
as I've done this job, which is a long time now. Do you recognize in dealerships, do customers talk
about the fact that they're there because of safety? What are their particular features that
they know as being on a Volvo or is it just this overarching sense that a Volvo is safe?
Yeah, I think it's an overarching general positioning that we've been consistent with
on the beginning. We had a conference very recently, we took our investors to the Safety
Centre in Sweden. If there is any doubt ever in anyone's mind around the jeopardy of a car,
so yes, everyone talks about 0-60 or whatever and that's a key excitement point, but actually
watching a live crash test, you could hear a pin drop and everybody was just silent for a good
10 minutes afterwards on the basis that it brings home just how powerful these cars are generally
and actually if it goes wrong, the first thing you want to be thinking about is the safety of that
we watched it live, it was really critical and the main thing I had as feedback is we need to
make sure we bring this to life more and more because to the point I made, as soon as you're
thinking about your son and daughter driving a car, the first thing you think about is safety
and I think we've been really consistent around that message rather than trying to move on to a
new one because actually that is our heartland, it's what we stand for and all of us are immersed
in that and unapologetically so, it's a key building block so I think the general feeling is
we've been consistent therefore safety is rooted in our DNA rather than it's because of this feature
or this feature, it's a general composition from all of us. Okay thank you, moving on to you,
so you used to work in consumer goods and for brands such as E45, you've been in the
country for a few years now, it must have been a huge transition for you, what was the appeal
in the first place? Well I mean mainly the whole family brand piece, when the opportunity came
along I always look at brands, brand appeal, brand equity and also love working on brands that have
a really strong heritage and then grow from that so really anchored in something meaningful
and then moving more into mainstream so E45 being one of them from Heartland in Exma
through to, I'm sure you haven't chatted about that very much in this space, but Heartland in Exma
through to mainstream moisturization, the same with the car in terms of Volvo having a rooting
safety and then the evolution to these modern products that we see today and it being such a
family brand, it felt like if you put the consumer at the heart of everything you actually can see
that transition is more natural than you might think rather than thinking FMCG, FMCG2 automotive
which makes less sense, think about the end point and it really did appeal and also I think when
you get into being a leadership role having a culture fit is absolutely critical and I felt that
as soon as I walked in. So you've mentioned some commonalities there, what did you identify as
you know the transferable skills that applied in both of those settings? Well I came in as
consumer director so the only thing I could do was represent the layperson which I felt the
industry was missing because most people here and most people in other areas have worked in the car
industry for a long long time, probably haven't bought a car in 20, 30 years and I felt it was
a really good opportunity to represent the consumer, talk about some of the pain points, bring them to
life, ask questions and really challenge how we do things in a different way and the great thing
was coming in as a consumer director the expectation was exactly that so it wasn't to know how to
operate in the business as it is today, it was to shed light on how we get better with interacting
with our customers and how we set up with the direct model so that was a really good opportunity.
So you've sort of identified some areas there that could have could be improved upon,
conversely what are some strengths you've seen from the automotive industry?
So I think when you go through any kind of transformation, transmission is hard,
the first thing that happens is you all lean in as a collective and from doing that it's really,
really, really eye-opening how the consumer is really the central part for everybody and actually
how retailers as much as there's a profit to be made and we shouldn't be apologetic about that,
they really, really care about the customer and some of them have had family members come through
the ranks, buying cars off them for a number of years and they were so passionate and also
passionate in making sure that they look after them. Now all of that translates in different ways
but the core of it when we were doing the particularly the director consumer transformation
was we all want to make sure that end person gets the best outcome, whatever that is so there was
lots of things to fix obviously when I came in around pricing the haggle feelings some of the
things that are perceived as quite negative but actually that closeness and that relationship
that they built over the years and years is something that they held really, really close to
their hearts and I could really see the passion there. So you've been at Volver for five years?
I'm half, yeah. What has been your biggest highlight in those five years?
It's got to be the direct model, I mean doing something that the rest of the industry largely
turned its back on and being bold enough to keep going you know when we went through the
initial setup of making sure it worked and then getting the phenomenal results that we've had
so you know growing to 66 and a half thousand units which we've never surpassed 60 or certainly not
since 1989 and being able to do that with confidence and importantly growing market
share to three and a half percent that was you know to do that knowing that more people are
choosing our brand is just been the key highlight for me and bringing the team on the journey as
well because to go to that outcome and knowing now that we're in a really strong place we are
the biggest market in Europe the third globally for Volver cars that's really important and being
able to do it in my way as a leader and bringing people on the journey has really really that's
definitely the bit that I'm most proud of. Brilliant so one final question what are you most excited
about in the next 12 months for Volver? So many things um there's lots more to come we've talked
a little bit about the product launches that are coming I think the thing that I personally am most
excited about is the next phase of D2C because we've really now proven we can operate in the
model we've proven we can do it at scale you know the September number really demonstrates that
the March number demonstrates that um but now taking it to the next level are really demonstrating
why going to direct to consumer enables better consumer closeness it enables us to leverage
data better um it allows us to really work as a collective team and allow people to shop how
they want to shop I think that's the bit that you know we're going to see happening now in the next
12 to 18 months so taking it to the next level we're all really excited about that. Brilliant well
thank you so much for your time and best of luck with it all. Thank you thanks for joining us for
this podcast Steve Cropley and Matt Pryor that's me we'll be back on Wednesday for our regular
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About this episode
Rachel Burgess interviews Nicole Melillo-Shaw, the managing director of Volvo UK, discussing the brand's recent successes, including record sales in September and the launch of the new EX30 model. They explore Volvo's shift to a direct consumer sales model, addressing challenges and dealer relationships. Nicole shares insights on electrification, the importance of safety, and upcoming models like the ES90 and EXC60. The conversation highlights Volvo's commitment to innovation and customer experience in a competitive automotive landscape.
Volvo just had its best-ever sales month in the UK this September - and UK boss Nicole Melillo-Shaw says it’s no accident.
The brand’s move to a direct-to-consumer model, the buzz around the new EX30 – which has doubled orders in recent months – and a sharper retail experience have all powered the surge, she has told the Autocar podcast.
Tune into this episode of the Autocar Meets podcast to get the full lowdown on Volvo's secret sauce for success, hear why a radical new way of selling cars has been a big hit with customers and dealers, and how the firm will learn from some of the EX90's hiccups as it lines up a new family of Audi-chasing EVs.
