Volkswagen launches BEV subscription service in Germany
03 September 2021
Volkswagen (VW) has launched a new car-subscription service in Germany. Customers can now use the carmaker’s ID.3 and ID.4 battery-electric vehicles (BEVs) while paying a monthly fee.
The new service, AutoAbo, allows customers to rent one of VW’s BEV models from €499 a month. The subscription programme helps bolster the company’s rapid and systematic transformation from a vehicle manufacturer to a mobility-services provider.
‘A growing number of people do not want to own a vehicle permanently but would like the exclusive use of one for a defined period. The Volkswagen AutoAbo is a flexible new subscription offering that is mid-way between leasing and car-sharing,’ explained Klaus Zellmer, board member for sales and marketing at Volkswagen. ‘We estimate that, by 2030, around 20% of our revenue could come from subscriptions and other short-term mobility offerings.’
In the coming months, VW aims to make more than 2,000 nearly-new cars available through AutoAbo, creating what it believes will be one of the largest subscription models in Germany. By offering just its latest BEV models, the service also conforms to the manufacturer’s carbon-neutrality objective and increases its electrically-chargeable vehicle (EV) sales under its ‘Way to Zero’ plans.
The service also allows drivers to try a BEV for an extended period, while the all-inclusive monthly price will help offer value for money against a technology that is often seen as expensive. It could be an important factor in allowing drivers to see the benefits of electrification and how it would suit their commuting needs.
Dealer involvement
The AutoAbo model is available with three and six-month minimum subscription periods. After this time, customers can terminate the agreement whenever they wish. The contract covers around 800km a month and a full-service package with registration, roadworthiness tests, maintenance and servicing, insurance, and road tax. As a special offer to mark the launch, customers can have a car delivered to and collected from anywhere in Germany with 14 days’ notice. In the future, cars will be delivered via the dealer network.
VW states that its dealer network will be incorporated into the subscription model right from the start of the service through the offer of maintenance and repairs. The network’s integration into the model will be intensified gradually so that dealers remain the Volkswagen brand’s face to its customers. At a later date, the plan is for customers to be able to sign up for a subscription at their dealer. ‘We will continue to make full use of the advantages of our strong dealer network,’ said Zellmer.
However, according to German publication Autohaus, while the Volkswagen and Audi Partner Association (VAPV) confirmed that there were discussions with the manufacturer on this subject, no agreement has been reached on the involvement of retailers. Among other things, the amount of the delivery fee that the trade should receive is still a matter of dispute.
In addition, the VAPV also has issues with terms around the delivery of vehicles, believing the ID. models need the involvement of the dealership rather than a third-party logistics company that VW plans to use.
‘As a Volkswagen/Audi partner, we contribute significantly to branding and have always maintained high-quality delivery,’ VAPV president Weddigen von Knapp told the publication. ‘Experts have been explaining the operation [of the ID. Models] to customers, which is crucial given the huge role connectivity plays in these vehicles. To now have this work done by third parties seems problematic to us.’
Online platforms
Alongside the launch of AutoAbo, VW is making progress in digitising its sales channels as part of its Accelerate strategy. Pursuing a data-based business model, the carmaker is looking to attract new customers as well as tap additional streams of revenue.
Just a few months after launching the AutoAbo subscription model, Volkswagen will be offering online leasing and online sales, initially for models from the ID. family but then also for new and used cars with any drive system. The carmaker states that dealers and their vehicles will be fully integrated into Volkswagen’s central digital marketplace.
In this way, the carmaker is seeking to reach a larger customer base and generate additional revenue. ‘We are responding to changes in customers’ purchasing behaviour and enabling them to conclude contracts at a dealer or online. In both cases, we need a strong online presence coupled with the customer proximity and local presence provided by our dealers. A strong brand is based on a promise and trust,’ added Zellmer. The plan is for customers to choose their preferred dealer to advise them, provide service and deliver their vehicles. The dealers will receive the same commission as if the vehicle had been ordered from them directly.
