Volkswagen AG is all set to launch a new sales model all over China. The company will be opening showrooms in city centers across the country for electric vehicles. Abstaining from the traditional sales system that is widespread in the industry, the German automaker is to offer fixed prices in the showrooms.
The first showroom was opened in the eastern city of Hangzhou by Volkswagen’s joint venture with SAIC Motor last week. As per their social media post, the showroom is named ID. Store X and it sells its ID. range of family cars.
In their official announcement, Volkswagen informed that customers can either order cars directly from the company’s website, a phone app, or authorized dealers at a fixed price. The company is not investing or operating the stores as they are all handled by selected dealers.
The German automaker also revealed that the dealers will not be responsible for maintaining the car inventory and they will be given a commission from the vehicle sales.
Before this move by the company, most automakers such as Volkswagen, General Motors, Toyota Motor, and others conventionally set an official price for their product and the dealers usually keep a car inventory and could offer discounts hike the prices depending on the market and demand for a particular model.
Their new attempt to bring a change in the industry takes them one step closer to Tesla Inc’s sales method that offers direct purchasing for customers excluding dealers entirely. Tesla manages the entire process from production to pricing to sales to delivery. They add operational charges for running the wholly-owned stores.
In the electronic vehicle market, the higher the numbers of showrooms the higher the chances are of dominating the entire market. Right now Nio Inc has 189 showrooms, Tesla has more than 150 showrooms and service centers in China. Also, Xpeng Inc has 116 and Li Auto Inc has 45 showrooms, so far till the end of September.
SAIC-Volkswagen has revealed that it will launch 40 ID. Store X showrooms in 29 cities all over China in the next 1 or 1-2 years. Volkswagen’s other venture with FAW Group will soon be announcing their detailed sales plan for the electronic vehicles.
Last month Volkswagen announced that the company will be launching eight ID. family models in China collaborating with its local partners SAIC and FAW by the end of 2023. According to the State Council said last month, the sales of electric, plug-in hybrid, and hydrogen-powered vehicles will raise the new car sales by 20% from the current 5% in China by 2025.