Volkswagen Group is radically overhauling its enterprise technique to save cash and keep afloat, and it could axe its Tesla-inspired direct-to-consumer retail mannequin for EVs in main European markets.
In a press launch, VW stated that promoting EVs via direct-to-consumer fashions whereas additionally promoting ICE automobiles through conventional retail operations was too complicated in Europe’s weak auto market, pointing to what it says is the gradual tempo at which shoppers are shopping for EVs.
“Given difficult framework circumstances, we should reevaluate if our present company mannequin for all-electric automobiles delivers the very best buyer expertise,” Marco Schubert, the VW Group board member answerable for gross sales, stated in an announcement. Nonetheless, he added that direct-to-consumer gross sales will stay a “long-term goal” for the automaker.
Tesla’s revolutionary direct-to-consumer mannequin, which bypasses conventional dealerships in favor of promoting automobiles straight via its personal community of shops and on-line, has fully disrupted the way in which wherein automobiles are offered in Europe, with many legacy automakers attempting their greatest to comply with swimsuit in a extremely regulated auto market. In VW’s case, its EVs will be bought through sellers, and the seller earns a set, decrease margin with no need to tackle advertising and marketing prices or carrying prices for stock.
The doable retail revamp consists of VW model automobiles but in addition Audi, Skoda, and VW industrial automobiles in France, Germany, Poland, Spain, and the UK.
In 2020, VW launched its direct-sales mannequin for EVs, and the outcomes from its evaluation are anticipated to be launched in March of subsequent yr. VWs’s Cupra model, nonetheless, will proceed to sells its EV beneath the direct-to-consumer mannequin, as will all VW automobiles offered in Eire and Sweden, no matter drivetrain.
This comes at a time when VW is radically restructuring its enterprise to chop prices, and plans to shut down three factories in Germany – the primary time within the firm’s 87-year historical past that it’s closing factories on its residence turf. The plan consists of reducing tens of hundreds of jobs and slashing pay for 10% of its remaining workers.
The model can be looking for to streamline manufacturing and improvement processes, shaving off months on the event cycles of particular tasks to assist tighten the belt, experiences Automotive Information Europe.
VW is closing its Audi plant in Brussels the place it makes soon-to-be-retired Audi Q8 E-Tron – an €80,000 electrical SUV that suffered from low gross sales – in just a few months. The corporate introduced that it’s going to shut the manufacturing unit on February 28, 2025, with 3,000 staff dropping their jobs within the Brussels space.
Picture credit score: Volkswagen Group
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