Volkswagen will soon stop selling cars

The German car manufacturer wants to get its ailing business back on its feet with a fundamental change in strategy. In the future, VW will no longer sell new cars to customers. The money will flow into the coffers in another way.

VW fights against problems

Volkswagen has been relying entirely on electric cars for some time now. Recently, however, there have been delays with the so-called “future model” called Trinity. Due to problems in developing software for its vehicles, models such as the ID. Golf will probably not come onto the market for several years. Overall, the global corporation from Wolfsburg is weakening considerably.

Radical change of the business model

Not least in order to boost sales of electric cars, the business model is now being completely overhauled. Similar to the step taken by many software providers in recent years, VW no longer wants to sell its own cars, but only offer them as a kind of subscription as part of “Vehicle on Demand”. Customers will no longer own the vehicles, but will only use them for a fee.

In the future, drivers will be able to lease vehicles for a longer period of time or rent them for a short period of time using a mobility app, reports Automobile Week The idea behind this is that the cars remain in VW’s possession. This gives the car manufacturer full control over their use and prices.

Customers also have to have the vehicles serviced in VW partner workshops. According to Christian Dahlheim, head of VW Financial Services, this approach “makes a significant contribution to profits”. In other words, it generates considerable additional revenue.

Full control as a goal

However, at least as important for Volkswagen in the new business model is the fact that the company has full access to all the data on the cars. “We will then know everything about the car and a lot about the customers,” says Dahlheim. This will allow the strategy to be further coordinated and improved. VW will only sell the cars as used cars when it is no longer worth renting them out, for example because they have become too old.

This would allow the company to control this market and set the prices. Artificial intelligence will be used to do this, analyzing the EU markets and automatically setting optimized prices. Because “Europe has to be profitable,” says Dahlheim. “A significant price lever is crucial. It has to be well into the four-digit range.”