The rollout of electric vehicles requiring less maintenance than ICE cars will reduce dealer revenue from servicing, according to Volkswagen’s sales boss.
Martin Sander, member of the board of management for sales, marketing and aftersales for Volkswagen Passenger Cars, said that this change would require the manufacturer to work with its dealers to create a ‘completely new business model’.
Sander, speaking at the Society of Motor Manufacturers and Traders (SMMT) Electrified summit, said: “Battery electric vehicles, we see now, do not need a lot of maintenance and repair. Great for the consumer – not so great for our business, for our retailers, because as you know, service is one of the major income streams and profit streams for the automotive retail trade.
“If we do not change anything, if we just keep doing business, our dealer networks in Europe will have a big problem.”
Ensure you always get AM insight. Make us a preferred source of news on Google.
ADAS also a factor in reduced dealer servicing demand
Sander explained that in addition to the reduced maintenance level needed for EVs, servicing revenues would also be affected by the increased rollout of driver assistance systems reducing the number of collisions.
He said: “This tremendously important income stream for our retailers is going to at least diminish.
“So, we have to think very, very hard, together with our retailers, how we can set up a more efficient way of servicing cars, how we can take cost out of the system, how we can generate additional income streams, in order to turn this around and create a completely new business model that also allows us to serve our customers in the future where this big, solid income and profit stream of servicing vehicles will not be there anymore.”
Sander added that these changes were already evident in countries such as Norway and Denmark where the EV rollout was particularly advanced.
He said: “It’s reality in these countries already. Business completely shifting.
“We have to get ready in order to rebuild a new business together with our retailers.”