Volvo Cars South Africa to cut dealership network by 60%

Volvo Cars South Africa (VCSA) is trimming its local network from 19 dealers down to just seven.

The move, according to the automaker, is part of a broader global strategy shift aimed at improving customer experience while aligning with trends like electrification and digital retailing. Only four motor retail groups will continue to represent the Swedish brand in South Africa: CMH, SMH Bedfordview, Tom Campher Motors, and Rola Motors Somerset West. These partners will operate from seven key locations across Gauteng, KZN, and the Western Cape.

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While VCSA insists it remains committed to the local market, this decision hasn’t been without controversy. The Motor Industry Staff Association, which represents over 66% of Volvo dealership employees, expressed frustration over the lack of prior consultation. The union accused the brand of breaching Section 189 of the Labour Relations Act 66 of 1995, which requires employers to consult employees in the case of potential retrenchments.

Volvo maintains that no job losses are expected as part of this realignment. However, it also pointed out that dealership employees are not directly employed by Volvo itself, which limits the company’s legal obligations in this regard. That said, Volvo Cars SA claims it is working with its retail partners to limit the impact on staff. Some employees have reportedly already been absorbed by other branches or dealerships staying open.

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The decision to close certain dealerships was based on a mix of factors, including performance and sales potential in each area. Volvo said it expects the closures to be finalised by the end of the second quarter of 2025, with customers being informed directly by their local dealership once closure dates are confirmed.

The restructuring also signals Volvo’s continued push towards a more streamlined, sustainable business model. The brand has already made it clear that its future lies in electrification, digitalisation, and offering a consistent premium service — ideally through fewer, better-performing outlets. Though Volvo has acknowledged the financial losses some dealerships will face as a result of the closures, it said discussions are ongoing with affected parties. For customers, the company says the shift will result in a more focused and seamless retail experience.

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