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Jurgen Stackmann

SHOWROOMS in the CBD, direct OEM sales, service factories, scalable “full-feature dealerships” and pop-up stores will form Volkswagen’s new European dealer network structure from April 2020.

 

The plans were unveiled in Europe this week as Volkswagen asked franchisees to sign new contracts to allow a sweeping overhaul of how the brand will sell cars in the future.

Each dealer may be structured into a market area with only one full-feature dealership and then expanding into the PMA with facilities such as “city showrooms, pop-up stores, service factories, used-car centres or scalable full-feature dealerships”, Volkswagen said in a statement.

It said online sales would undergo considerable expansion and direct sales would be adopted. Direct sales would be used exclusively for online purchases.

“Within the framework of its new digital partnership with its dealers, Volkswagen will develop a joint internet platform which will handle the entire purchasing process through to contract conclusion, including financing, payment and even used-car trade-ins,” the company statement said.

The link between the company and the customer would be handled by the relevant dealership.

Volkswagen Group board member for sales and former director of Skoda and Seat, Juergen Stackmann, said “this is the right step at the right time”.

“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.”

In a report by Automotive Management Online, Mr Stackmann said Volkswagen “has qualified sales and service partners, an established logistics network, strong products and loyal customers, and the combination of these with the new elements would define its business in the future, such as with digital products and services or online sales opportunities”.

The Volkswagen European Dealer Council has backed the car-maker’s new plan and said it actively participated in shaping the business model.

Dealer council president Matti Poerhoe said: “We believe in the new business model as it will strengthen dealers’ entrepreneurial responsibility.

“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.”

In Australia, Volkswagen Group Australia general manager of dealer development, David Stone, said “we’re very comfortable with the extent of our (Australian) dealer network and nature of our retailing arrangements”.

“We’d see things such as shopping centre activations as marketing tools that are supplementary to the main business,” he told GoAutoNews Premium.

By Neil Dowling

Volkswagen City showroom, Hamburg

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