Volkswagen said on Wednesday it will make a triple-digit million-euro investment to expand its digital and showroom sales in Germany through 2023.
The investment, which the automaker said is its largest for retailing in its home market, will focus on increased product and service training for dealers, upgrading of dealerships, and a digitalization “boost” for sales channels aimed at new and used vehicles.
In addition, VW will launch an online marketplace for dealers this summer.
“We need customer proximity and local presence,” VW brand sales and marketing boss Klaus Zellmer said in a statement. “Customer orientation also means taking into account severe changes in purchasing behavior. It goes without saying that our sales system must be available to customers both online and offline.”
VW is initially focusing its online sales on its ID family of electric cars, opting for an agency model rather than a traditional one. With an agency model the automaker sets the transaction price rather than the dealer, which gets paid for each car sold.
The aim of the investment is to improve customer experience and strengthen dealerships.
The plan also includes increased training in e-mobility, as well as additional replacement mobility options for customers during servicing appointments.
Pedro Pacheco, who is a senior research director at Gartner, said VW’s investment shows that automakers will be shaking up their retail operations, largely because a new approach is needed for customers looking for electric cars and alternative mobility solutions.
“The profitable mass adoption of electric vehicles entails a very different way of selling and servicing cars. Moreover technology also opens major opportunities for optimization and cost reduction in these areas,” Pacheco said in an email reply to questions.
VW said in the release is want the changes to make perception of the brand “more attractive, more innovative and more emotional” in Germany, where the automaker had a market-leading 19.6 percent share of vehicle sales through April, according to the KBA motor authority.
The funds, which VW has already approved, add to the coronavirus support already agreed to with the company’s network of dealers.
“Germany is our home market,” Zellmer said. “We will be providing a further significant boost to sales here and will be making Germany a model for other markets, also with respect to digitalization.”
Gartner’s Pacheco added that “whatever changes Volkswagen introduces to their dealer network in Germany will likely be rolled out around the world.”
Zellmer also said the company wants to set new standards for the customer experience throughout the purchasing, leasing or servicing of their vehicles.
The digitalization and e-mobility efforts are key elements of the company’s ACCELERATE strategy, which includes data-based business models, software integration in the vehicle and the development of a digital ecosystem.
The automaker more than doubled deliveries of full-electric vehicles and increased its plug-in hybrid sales by a triple-digit percentage in the first quarter.
VW is also making major investments abroad, announcing earlier this month the finalization of a commitment to launch a new investment cycle in Brazil.
The company also began construction on a factory at its joint venture with Jianghuai Automobile in the eastern city of Hefei to ramp up EV production in China.
