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Volkswagen is planning to make major changes to the structure of its global dealer network, starting in 2020.
At a major dealer conference in Berlin, the German car making giant laid out plans to re-jig both the physical layout of its dealerships, and the way they operate, so that 'round the clock' service can be provided to customers in the future. The plans incorporate an expansion of online sales, and the possibility of Tesla-style direct sales too.
"This is the right step at the right time," says Jurgen Stackmann, Board Member for Sales of the Volkswagen brand. "We have adopted this approach because our business environment is changing at a breathtaking pace in view of new technologies, changed customer expectations and new market players."
Stackmann claims that Volkswagen "is outstandingly well-positioned, with qualified sales and service partners, an established logistics network, a strong product portfolio and extremely loyal customers. He said that the new sales model was the combination of this infrastructure with the new elements which would define business in the future, such as digital products and services or new on-line sales possibilities for products and services."
Not co-incidentally, the changes are set to arrive alongside the first of Volkswagen's all-electric I.D. range in 2020, and the idea is not just to sell the car and provide the usual after-sales and servicing backup, but to give individual, round-the-clock backup to owners of these pioneering new cars. This way, we will learn more about our customers' needs and will be able to develop optimum tailor-made offerings for each individual customer through intelligent data management. This is already practiced successfully in other sectors," said Stackmann.
Some of the groundwork has already been laid for these changes with Volkswagen's existing connected car systems, which can accept over-the-air software updates, as well as communicate servicing needs and bookings with local dealers.
To those existing services, new ones will be added, including digital parking and package delivery services, as well as the new We Share car sharing service, which is going to start trials this year.
Volkswagen also intends to dramatically expand its web presence, and start providing a full online sales service, where customers will be able to pick their car, and go through the entire sales process. "including financing, payment and even used car trade-ins."
It doesn't mean the death of the traditional dealership, although these will probably become fewer in number in time. Volkswagen says that 'full-feature' dealers will still be used, but five new dealership formats will be introduced. These will include city showrooms, pop-up stores, service centres, and used car specialists. Volkswagen will also allow dealers and dealer groups to tailor their setups more closely to their own needs, rather than necessarily having to invest in a huge 'plate-glass palace' dealership.
"We believe in the new business model as it will strengthen dealers' entrepreneurial responsibility," said Dr Matti Pörhö, President of the European Dealer Council (EDC), which represents the interests of Volkswagen dealer councils in Europe. "In the areas of digitalisation and E-mobility, the major tasks for the future, dealers will play a key role. To shoulder these challenges, dealers need a firm foundation of profitability." Pörhö praised the fair and open cooperation with Volkswagen: "We actively participated in shaping the business model right from the start."