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Polestar is changing course, abandoning stores in shopping malls, and will develop a dealer network together with Volvo.
Polestar's newly appointed CEO Michael Loescheller said he would accelerate the expansion of the company's retail network, moving away from trendy shopping mall locations in favor of more traditional car dealerships – mostly next to existing Volvo franchises.
Loescheller acknowledged that the online ordering process and the format of stores in shopping malls need to change. “Buying a car is an emotional process,” he said. “You have to understand the technology; I personally want it explained to me.”
“Traditional manufacturers define everything down to the smallest detail, which increases costs and causes dissatisfaction for everyone. But does this really bother the customer? We will move to a pragmatic model, which we call not a true agency – not a pure agency model.”
This means that Polestar, like other major automakers, will abandon the fixed-price, no-haggle sales model that the company has promoted since the launch of the Polestar 2 in 2020. Instead, a system will return where individual dealers can offer discounts and bonuses depending on their targets and margins.
“If you come in and say, ‘Is there a way to get another 5% discount?’ we’ll find a solution for you,” said Loescheller. “In a pure agency model, that’s not possible. I think everyone is moving away from this black-and-white system, right?”
The first such showroom is already open at Polestar London North near Elstree, Hertfordshire, with a similar facility in Southampton almost ready to launch.
Loscheller doesn’t think locating dealers next to Volvo showrooms will hurt his business or affect sales. “The two brands complement each other perfectly,” he said. “Volvo is about safety and comfort, we are about performance and sustainability.”
“Maybe one or two customers will go from A to B, but that’s the exception,” he added. “Volvo dealers know service; I want to find more Volvo retailers who want to work with Polestar – it’s additional business.”
Loescheller plans to expand Polestar's retail network from nine to 17 locations over the next 18 months. "I don't want another 50 locations because that would reduce sales. It's better to give it to those who want it," he explained.
