The Volkswagen Group is cutting its number of physical dealerships across Europe to focus more on selling cars online.
The move is designed to boost profits by lowering any overheads it pays for in those dealerships that will be closed, plus increasing the sale price of cars by effectively removing the option to haggle over the price.
Brokers will still offer discounts via dealers looking to make sales, of course, but Volkswagen, Audi, Skoda and Seat would like you to stop asking for money off their new cars, thank-you-very-much, and if you go direct, that’s likely to be the obstacle you’ll face. In fact, the cuts and shift to online purchasing will affect all 12 VAG brands.
Volkswagen’s target is to raise profitability and efficiency by as much as 10 per cent across the vast 3000-dealer network. Trimming those worst-performing dealerships is a brutal but effective way of doing it. Another stiff move involves VW seizing the right to dictate workforce sizes in its dealers, trimming staff numbers to ‘optimum levels.’ Sounds ominous.
Auto Express writes that the average number of staff per VW Group dealership is 35, with four posts expected to be cut or ‘reassigned’ per location. That’s got to make a few palms sweaty in franchises all over the continent.
Source: Auto Express