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Volkswagen: Car subscription started - with pure electric vehicles

The company is driving the transformation from a pure manufacturer to a mobility provider with its electric car subscription model, between leasing and sharing, and believes that around 20 percent of revenue will come from subscriptions and other mobility offerings by 2030.

Consistent: If it's a subscription, then make it electric. VW is acknowledging the trend away from ownership towards usage. | Photo: VW
Consistent: If it's a subscription, then make it electric. VW is acknowledging the trend away from ownership towards usage. | Photo: VW
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Johannes Reichel

The Wolfsburg automobile manufacturer Volkswagen has now launched a car subscription model in Germany. Customers can subscribe to the fully electric bestsellers ID.3 and ID.4 on a monthly basis, starting from 499 euros. This is seen as a milestone in the "Business Model 2.0". By the end of 2021, the company also plans to launch its offerings for online leasing and online sales in Germany – initially through agency sales for the ID. family, after which the platform will be available as a marketplace for dealers to offer combustion and hybrid vehicles.

“The number of people is growing who do not necessarily want to own a vehicle permanently, but want to use it exclusively for a defined period of time. For them, we have now developed a new, flexible offer with the Volkswagen Auto Subscription, positioned between leasing and sharing,” explained Klaus Zellmer, Board Member for Sales and Marketing at Volkswagen.

He forecasts that by 2030, around 20 percent of our revenues could come from subscriptions and other short-term mobility offers. The manufacturer wants to provide more than 2,000 "young used" vehicles for the car subscription in the coming months, the choice being between the ID.3 and the ID.4, which are exclusively fully electric vehicles. The subscription was conceived in collaboration with the subsidiary Volkswagen Financial Services, acting as the development center for car subscriptions for the group's brands. The Auto Subscription is available with a minimum term of either three or six months, after which it can be flexibly terminated by the customers. The contract includes everything except electricity, which means 800 free kilometers per month, full service with registration, main inspection, maintenance, inspections, insurance, and taxes. As a launch offer, the customer can have the vehicle delivered and picked up at their desired location with a lead time of 14 days. In the future, delivery via the dealership network is also planned.

The Dealership is Involved

The dealership will be integrated into the subscription model for maintenance and repairs and will be even more involved in the future, to make the Volkswagen brand face the customer in this area as well. At a later stage, it is planned that customers may also conclude their subscriptions directly at the dealership. “We will fully exploit the advantages of our strong dealership network,” Zellmer emphasizes. 

In addition, leasing and sales agreements will also be offered online – initially for models of the ID. family and later for new and used vehicles of all engine types. Dealers and their vehicles would be fully integrated into Volkswagen's central digital marketplace, www.autosuche.de. The car manufacturer hopes to appeal to a larger customer base and generate additional revenues this way. The dealership remains an important partner even in online purchases, the headquarters emphasizes. Customers specify their chosen dealer for advice, service, or delivery online, and this dealer receives the same commission as in the case of a direct order with the dealership.

“We are responding to the changing buying behavior of customers – the customer can flexibly choose between concluding contracts at the dealership or online. In any case, we need a strong online presence combined with strong customer proximity and local presence through the dealership, because a strong brand is based on a promise and trust,” says Zellmer.

Translated automatically from German.
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