Volkswagen Group is radically overhauling its enterprise technique to economize 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 by way of 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 situations, we must reevaluate if our present company mannequin for all-electric automobiles delivers the absolute best buyer expertise,” Marco Schubert, the VW Group board member liable 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 by way of its personal community of shops and on-line, has fully disrupted the best way wherein automobiles are bought in Europe, with many legacy automakers attempting their finest to observe swimsuit in a extremely regulated auto market. In VW’s case, its EVs might be bought through sellers, and the supplier earns a hard and fast, decrease margin with no need to tackle advertising and marketing 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 assessment are anticipated to be launched in March of subsequent 12 months. VWs’s Cupra model, nevertheless, will proceed to sells its EV beneath the direct-to-consumer mannequin, as will all VW automobiles bought 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 house turf. The plan consists of reducing tens of hundreds of jobs and slashing pay for 10% of its remaining workers.
The model can also be looking for to streamline manufacturing and improvement processes, shaving off months on the event cycles of particular initiatives 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 a couple of months. The corporate introduced that it’ll shut the manufacturing facility on February 28, 2025, with 3,000 employees dropping their jobs within the Brussels space.
Picture credit score: Volkswagen Group
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