"Higher Performance on Demand"

The shift to elec­tric mobil­i­ty is the biggest trans­for­ma­tion in Volk­swa­gen’s his­to­ry. We want to become the most sought-after brand for sus­tain­able mobil­i­ty and the leader in bat­tery-pow­ered cars. The Way to Zero con­ven­tion is our road map for tak­ing com­pre­hen­sive social respon­si­bil­i­ty for pro­tect­ing the cli­mate. In par­al­lel to this, for some time now we’ve been going through a trans­for­ma­tion in how we use media. We’re putting enor­mous ener­gy into dig­i­tal­iz­ing our cus­tomer com­mu­ni­ca­tions. We want to pro­vide peo­ple with the right con­tent in the right place and at the right time. The right way to act in a dig­i­tal ecosys­tem is a major fac­tor in the suc­cess of our sales. In addi­tion, our busi­ness model 2.0 is address­ing new tar­get groups, mak­ing inno­v­a­tive offers, and stream­lin­ing access to indi­vid­ual means of mobil­i­ty. To add an impor­tant note right away, deal­er­ships are and will remain our inter­face with cus­tomers, and we are work­ing very close­ly togeth­er with them. For the vast major­i­ty of peo­ple, buy­ing a car is an emo­tion­al expe­ri­ence that can­not sim­ply be dig­i­tal­ized. Sen­so­ry and tac­tile aspects—touching and test-dri­ving the car—play a very impor­tant role.

Yes, that’s pre­cise­ly the point. As men­tioned, we want to make access to indi­vid­ual mobil­i­ty even eas­i­er. So we’re offer­ing an entire range of options, from buy­ing or leas­ing cars to sub­scrip­tion and share-and-ride ser­vices. That’s enabling us to reach and delight many peo­ple who are not yet Volk­swa­gen cus­tomers. I’m con­vinced that this is a good instru­ment for build­ing loy­al­ty to the brand, as well as fos­ter­ing inter­est and plea­sure in elec­tric mobil­i­ty. I spent five years in charge of Porsche Cars North Amer­i­ca, where our expe­ri­ence with sub­scrip­tion mod­els was very pos­i­tive. Many of the sub­scribers had never set foot in a Porsche deal­er­ship before, but ended up buy­ing a car because we were able to inspire enthu­si­asm for the prod­uct in con­nec­tion with a subscription.

A strong brand needs a face. That’s why we’ll con­tin­ue to want brick-and-mor­tar deal­er­ships in the future. We need cus­tomer prox­im­i­ty and a local pres­ence. At the same time, a strong cus­tomer ori­en­ta­tion means tak­ing account of major changes in cus­tomer behav­ior. Our sales sys­tem will there­fore be avail­able to cus­tomers both online and offline, of course. That’s why we’ve been work­ing with deal­er­ships to build a dig­i­tal mar­ket­place for vehi­cles in stock, cus­tom-built, and used cars. This is of con­sid­er­able ben­e­fit to every­one involved, and we view it as a very impor­tant way of sup­port­ing e‑commerce. In con­crete terms: as of sum­mer 2021 we’ll have a mar­ket­place at vw.com, where deal­ers can post their stock of new and used cars on a trans-region­al basis—including online leas­ing and financ­ing with cred­it rat­ings. Cus­tomers can view a wide range of cars on offer and buy them from the deal­er­ships online. Here, too, we’re quick­ly work­ing to add online financ­ing and pay­ment options. We’re expect­ing this approach to help us reach a lot of new inter­net-savvy customers.

First of all, we’re assum­ing that peo­ple will start dri­ving more as the pan­dem­ic comes to an end. There’ll be a back­log of repairs and main­te­nance pro­ce­dures that were post­poned dur­ing the lock­down. I also antic­i­pate a greater trend toward tak­ing vaca­tion trips by car. These and sim­i­lar changes in mobil­i­ty behav­ior will gen­er­ate new oppor­tu­ni­ties. Over the medi­um and long term it will be impor­tant to work with deal­er­ships to make even bet­ter use of exist­ing mar­ket conditions.

All kinds of things are chang­ing there too, of course. User behav­ior had already been chang­ing sig­nif­i­cant­ly before the pan­dem­ic, but the lock­down had a tur­bocharg­ing effect on dig­i­tal mar­ket­ing. Cus­tomer dia­logues used to come to an end when cars were pur­chased. Today, we want and need to accom­pa­ny our cus­tomers beyond that point in time. That’s why we’re work­ing full steam ahead on shift­ing cus­tomer jour­neys from a lin­ear track to a closed cir­cuit, in order to tai­lor our offers even bet­ter to what they desire. Nine­ty-five per­cent of poten­tial buy­ers are now start­ing the process by vis­it­ing our web­site. That shows the over­whelm­ing impor­tance of an excel­lent online pres­ence. It’s where we tell almost all of our cus­tomers what Volk­swa­gen stands for, and what prod­ucts we and our deal­er­ships can offer.

In order to help cus­tomers find what they’re look­ing for more quick­ly, we’ve con­sol­i­dat­ed all our online touch­points in a sin­gle place—OneHub. We’ve rolled it out at high speed in more than 100 mar­kets. Buy­ers enjoy a great cus­tomer expe­ri­ence and need just a few clicks to con­fig­ure their dream car. In con­trast to before, we now want to remain in dia­logue with cus­tomers after their deci­sion to buy or lease in order to offer not only tra­di­tion­al but also dig­i­tal ser­vices. For exam­ple, before they set off on vaca­tion we can offer Trav­el Assist or addi­tion­al bat­tery power on demand for long-dis­tance trav­el. We want and need to get these and other ben­e­fits across to our cus­tomers. Over the com­ing years we’re expect­ing these dig­i­tal aux­il­iary ser­vices over the entire vehi­cle life cycle to reach hun­dreds of mil­lions of euros in sales.

With respect to tar­get groups, a recent study has incor­po­rat­ed fac­tors like the effects of the Covid-19 pan­dem­ic. One of the results of social dis­tanc­ing is that some of the con­sumers sur­veyed are now expect­ing to pur­chase their next cars ear­li­er than planned. That is espe­cial­ly true of the younger gen­er­a­tion. Around one-third of 18- to 34-year-olds list­ed social dis­tanc­ing as a major rea­son for plans to pur­chase their next car. That fig­ure drops to 22 per­cent for 35- to 54-year-olds. If you’re ask­ing about the type of drive sys­tem and whether the desire for elec­tric mobil­i­ty is a func­tion of age, then I’d say no, it’s more a func­tion of atti­tude. Many Gen­er­a­tion Golf mem­bers, for exam­ple, are buy­ing our ID.3.

That’s a very impor­tant point, and we have an answer for this ques­tion too. Inte­grat­ing soft­ware into cars and into dig­i­tal cus­tomer expe­ri­ences is becom­ing one of the com­pa­ny’s core areas of exper­tise, and is guid­ing devel­op­ment toward a cus­tomer-cen­tric dig­i­tal ecosys­tem. The ID fam­i­ly is lead­ing the way here. Start­ing in sum­mer 2021 we’ll be the only large-scale man­u­fac­tur­er to be offer­ing over-the-air updates every 12 weeks for our ID fam­i­ly. That rep­re­sents an enor­mous advan­tage for users. Their cars will always remain cut­ting-edge, and cus­tomers can acti­vate the lat­est ser­vices on either a per­ma­nent or tem­po­rary basis. Updates will become the new nor­mal for cars as well—just like for cell phones and com­put­ers. Volk­swa­gen will be sub­stan­tial­ly reduc­ing com­plex­i­ty in struc­tur­ing these offers. Future car gen­er­a­tions will be pro­duced with con­sid­er­ably fewer vari­ants. Indi­vid­ual con­fig­u­ra­tion will no longer be defined by the hard­ware at the date of pur­chase. Cars will essen­tial­ly have every­thing on board already and cus­tomers will be able to acti­vate addi­tion­al func­tions on demand via the dig­i­tal ecosys­tem. That will sig­nif­i­cant­ly reduce com­plex­i­ty in pro­duc­tion. And then we’ll be ready for the next stage.

Every­thing that Volk­swa­gen is plan­ning for the future will be avail­able to cus­tomers in a car for the first time in 2026. All the rel­e­vant fac­tors are con­verg­ing in our Trin­i­ty project. The car will set new stan­dards in three areas: tech­nol­o­gy, busi­ness model 2.0, and modes of pro­duc­tion. Right from the start, Trin­i­ty will offer auto­mat­ed dri­ving at level 2+ with the poten­tial for level 4. It will save time for our cus­tomers and make dri­ving less stress­ful. With cur­rent annu­al sales of around six mil­lion cars, we at Volk­swa­gen have the vol­ume you need to scale up sophis­ti­cat­ed autonomous dri­ving devel­op­ments and roll them out world­wide. We’ll be able to make them avail­able and afford­able for many peo­ple. Begin­ning with Trin­i­ty in 2026, we’ll also be guid­ing the Group in form­ing a neur­al net­work above and beyond the fully con­nect­ed vehi­cle fleet. More­over, future cars will be con­tin­u­al­ly exchang­ing data on things like traf­fic con­di­tions, delays, and acci­dents. Volk­swa­gen will be cre­at­ing a self-learn­ing sys­tem with mil­lions of cars that will ben­e­fit cus­tomers of all of the Group’s brands.