Volvo Car South Africa is closing 12 of its 19 dealerships by mid-2025. Only seven showrooms in major cities will remain, mostly in Gauteng, KwaZulu-Natal, and Western Cape. The company’s shift from consignment sales to a wholesale model affects over 700 dealership employees. Customer service will continue, with warranties and service plans remaining valid. Volvo owners can still access repairs and maintenance at the surviving locations despite the significant network reduction.
Volvo Car South Africa (VCSA) is shutting down 12 of its 19 dealerships across the country, leaving just seven sales facilities in major metropolitan areas. The remaining dealerships will be primarily located in Gauteng, KwaZulu-Natal, and Western Cape provinces. This dramatic restructuring is set to be completed by the end of the second quarter of 2025.
Volvo slashes dealership network by 63%, retaining only seven locations in South Africa’s major metros.
The Swedish automaker says the move aligns with its global strategy focusing on electrification, digitalization, and sustainability. VCSA conducted nationwide dealership evaluations throughout 2024 to determine which locations would remain viable based on sales potential and other factors.
In a significant business model shift, Volvo is moving from consignment-based sales to a wholesale model. After February 1, 2025, dealers must purchase vehicles upfront rather than selling them on consignment. This change has sparked tension between the manufacturer and its dealer network.
Affected dealerships are facing substantial financial losses. Many dealers invested approximately R10 million in their facilities but have reportedly received buy-back offers of only about R500,000. Some are now exploring legal remedies to recover their losses. There are also allegations that VCSA prematurely removed vehicles from some showrooms, further complicating dealership operations.
While dealers will retain ownership of their physical facilities despite the closures, the compensation discussions remain ongoing. These talks may include financial settlements for affected parties, though details haven’t been finalized. The company is engaged in ongoing discussions for fair agreements and potential compensation for dealerships affected by the closures.
The restructuring has created uncertainty for over 700 dealership employees. While VCSA’s direct employees won’t be affected, dealership workers face potential job losses.
Unions including MISA and NUMSA have criticized the company for not following proper consultation procedures under Section 189 of the Labour Relations Act. MISA has threatened legal action to guarantee proper restructuring processes. The company failed to properly consult the union before announcing the major dealership closure plan.
VCSA says it’s working to assist affected employees with adjustments to other dealerships within their groups or to remaining Volvo dealers. However, workers report anxiety and communication gaps about their future.
For Volvo owners, the company promises continuity of service. All existing warranties and service plans remain valid through the remaining dealership network. The reduced network of seven locations will continue to offer repairs, maintenance, and sales.
Customer care teams are handling inquiries to maintain service levels during the adjustment. Despite the reduced footprint, VCSA aims to maintain its 2024 sales levels throughout 2025. The company believes its restructured network, focused on premium locations, will deliver consistent luxury experiences for customers. The remaining dealerships will be positioned to support Volvo’s future product launches and evolving business model in South Africa’s competitive automotive market.
Conclusion
Volvo’s withdrawal from 12 South African dealerships marks a significant change in the company’s regional strategy. Local customers will need to seek service at remaining locations or alternative providers. Industry analysts are monitoring whether this signals a broader pullback from other markets. Volvo hasn’t commented on potential closures elsewhere, but customers in other regions should stay informed about any announcements affecting their local showrooms.
