Volkswagen Group is radically overhauling its enterprise technique to save cash and keep afloat, and it might axe its Tesla-inspired direct-to-consumer retail mannequin for EVs in main European markets.
In a press launch, VW stated that promoting EVs by way of direct-to-consumer fashions whereas additionally promoting ICE automobiles by way of conventional retail operations was too advanced in Europe’s weak auto market, pointing to what it says is the gradual tempo at which customers are shopping for EVs.
“Given difficult framework circumstances, we must reevaluate if our present company mannequin for all-electric automobiles delivers the very best buyer expertise,” Marco Schubert, the VW Group board member liable for gross sales, stated in a press release. 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 vehicles immediately by way of its personal community of shops and on-line, has utterly disrupted the best way through which vehicles are offered in Europe, with many legacy automakers attempting their greatest to observe go well with in a extremely regulated auto market. In VW’s case, its EVs might be bought by way of sellers, and the supplier earns a hard and fast, decrease margin while not having to tackle advertising prices or carrying prices for stock.
The potential retail revamp consists of VW model automobiles but additionally Audi, Skoda, and VW business 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 dwelling turf. The plan consists of reducing tens of 1000’s of jobs and slashing pay for 10% of its remaining workers.
The model can also be searching for to streamline manufacturing and growth processes, shaving off months on the event cycles of particular tasks to assist tighten the belt, stories 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 a number of months. The corporate introduced that it’s going to shut the manufacturing facility on February 28, 2025, with 3,000 employees shedding their jobs within the Brussels space.
Photograph credit score: Volkswagen Group
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