VOLVO Cars South Africa's bold shift towards electric vehicles (EVs) has stirred up controversy, with workers' representatives yesterday strongly opposing the company's announcement of a restructuring plan that includes reducing its dealership network.

This strategic shift, meant to bolster Volvo’s position as the top-selling electric vehicle brand in the country, has raised concerns about job security among employees.

Volvo is reportedly refining its operations, including adjustments to its marketing and commercial strategy, which will strengthen how Volvo vehicles are positioned and retailed through the dealer network as the top-selling EV brand in South Africa.

Volvo confirmed its intent to refine operations, indicating that the number of local dealerships would decrease, although it did not specify the extent of the cuts.

This move comes as part of a broader initiative to invest more heavily in electrified mobility and introduce new models, including the flagship, all-electric EX90, set to launch in early 2025.

“While we have plans to resize our dealer network locally, Volvo remains fully committed to the South African market. This commitment is evident in the continued investment in electrified mobility and the introduction of new models,” Volvo said in a statement.

However, this restructuring has not gone without opposition.

The Motor Industry Staff Association (MISA) condemned the announcement, noting that the company neglected to inform the workers union, which represents over 66% of Volvo’s workforce, prior to making such declarations in line with the Labour Relations Act.

“It is a shame that employees at Volvo had to read that restructuring could impact a significant number of dealerships, causing panic and anxiety amongst MISA’s more than 700 members, without informing the Union prior to the announcement,” said MISA’s CEO for operations, Martlé Keyter.

“Our members can rest assured that the union’s legal department will ensure that Volvo follows the correct process. The Union will participate in a joint consensus seeking process attempting to minimize the envisaged resizing of the dealer network.”

Echoing these sentiments was the National Union of Metalworkers of South Africa (Numsa), which also represents employees in the manufacturing divisions.

Numsa’s Phakamile Hlubi-Majola said the union was dismayed to learn that Volvo intended to restructure and that the restructuring may result in the closure of dealerships without prior engagement with organised labour.

“In terms of the Labour Relation Act, Volvo has to engage organised labour before any restructuring or retrenchment can take place and we have not been officially notified,” she said.

“We condemn Volvo for not notifying organised labour. Regardless of this, NUMSA remains committed to defending its members and their livelihoods.

Volvo earlier this month issued a recall for three of its vehicle models in South Africa, the Volvo XC40 and two variants of the Volvo XC90 due to safety concerns.

The National Consumer Commission (NCC) confirmed in a statement last week that Volvo had notified it at the end of January that their investigations had identified software and mechanical issues that could compromise vehicle safety.

Volvo Cars South Africa in 2020 upped its ante with the introduction of a new site that allowed customers to buy or rent a new car online.

The online store was first for Volvo in the sub-Saharan Africa region, and is available exclusively in South Africa, with managing director at Volvo Cars South Africa Greg Maruszewski stating then that the online platform showed that the way people buy cars had changed.

“In 2020, Volvo Cars more than doubled its number of cars sold online versus 2019. Going forward, the emphasis on online will grow.” Maruszewski said.

BUSINESS REPORT