Volkswagen to decrease size of dealer network, launch online sales

Volkswagen prepares to decrease the size of its European dealer network and introduce online sales as it adjusts to changing buying habits, the German automaker stated on Tuesday.

Volkswagen is pushing to cut expenses across all of its 12 brands following the emissions scandal as it deals with the situation where they have to invest heavily in the shift toward electric cars.

In the most recent move it aims to boost profitability and performance at its 3,000-dealer European circulation network by approximately 10 percent and wants to cut the expenses of the network to help double the average return per distributor to 2 percent from 1 percent.

“We have for years remained in consolidation mode in all world markets,” VW brand sales chief Juergen Stackmann informed reporters. “This will certainly speed up somewhat in the next one, two years, also in Germany.”

However the executive gave no information on the size of planned expense reductions and the amount of dealers due to be axed under the automaker’s “future sales model.”

Customers of mass-market vehicle brands like VW’s are currently making greater use of online shopping, enabling them to better compare competitors offerings.

VW and dealers are now establishing a joint online portal, Stackmann said, without providing information.

Decreased costs will likewise come from greater use of new IT, allowing dealers to cut the time needed for servicing vehicles by as much as 70 percent, according to the automaker.

A VW distributor in Europe typically employs 35 staff and that workforce can be slashed by about four in time or the staff affected can be designated elsewhere, Stackmann stated.

Under the regards to the automaker’s new contracts with dealers, to be concluded early next year, VW wishes to bypass its right to determine workforce sizes, he said, enabling dealers to trim staff.