Costco Wants To Sell You A Chevy, And A Volvo

By Douglas A. McIntyre Published Oct 3, 7:08AM EDT

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Costco Wants To Sell You A Chevy, And A Volvo — © Tim Boyle / Getty Images News via Getty Images

Costco Wholesale Corporation (NASDAQ: COST | COST Price Prediction) has been in the car sales business for years. It occasionally runs the equivalent of a “sale”. The most recent sale promotes many of the models in the Chevy lineup, and niche cars made by small and troubled Volvo.

The Costco Auto Program is available to the big-box retailer’s members. Unlike most other retailers, Costco charges customers for the privilege to shop in its stores. The program sets prearranged prices with manufacturers, which in theory saves Costco members money. The plan covers new and pre-owned cars. Its car maker partners have to be thrilled with the results. Last year, members bought over 600,000 vehicles via the plan.

Costco said it picked Volvo and Chevy because they are the most popular cars in their classes. The Volvo XC90 falls into the luxury SUV category. The Chevrolet Silverado is the top truck purchased by Costco members through the program.

Volvo needs the program more than Chevy, General Motors Company’s (NYSE: GM) top-selling brand. It competes with Mercedes, BMW, and Audi, which all handily outsell it. Volvo recently did poorly in both the J.D. Power 2020 Intiatial Quality Survey and its 2020 U.S. Vehicle Dependability Survey.

In the current Costco sales plan, GM brands come with a discount of $1,000. This includes Chevrolet: Blazer, Colorado, Silverado 1500/2500/3500, Suburban, Tahoe, Traverse, and Blazer; Buick: Encore and Enclave; GMC: Acadia, Canyon, Sierra 1500/2500/3500, Yukon and Yukon XL. The Volvo $1,500 discount is on its Volvo XC40, XC90, and XC60.

There is a $3,000 incentive for the Chevrolet Bolt EV, which has been a staggering failure for GM. Bolt sales are a small fraction of those of primary competitor Tesla Inc (NASDAQ: TSLA).

Several of the GM models sell extremely well outside the Costco program. The Silverado is among the best selling vehicles in America. It competes in the full-sized pickup segment with the Dodge Ram, and Ford Motor Company (NYSE: F) F-150, which is the best selling vehicle in America.

The Costco Auto Program undoubteled gets members good prices on cars and good service. Otherwise, sales last year could not have approached a 600,000 figure. It is also good for the car makers, and particulalry those which struggle.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.