Volkswagen ramps up used-car business, buys old vehicles from market

Automobile major Volkswagen is ramping up its used car business, by purchasing such vehicles from the market in tie-up with platforms in this space. The company sees an  opportunity in this business once the lockdown is lifted as people will choose individual mobility. 

The company sold around 20,000 used cars last year and plans are to surpass this number going forward, Steffen Knapp, director, Volkswagen India told Business Standard.

Volkswagen has its own used-car chain, Das WeltAuto, and has been focusing on exchange of cars. However, plans are to ramp up this business by purchasing used cars from the market in tie-up with various used car platforms. 

The company is building up the number of evaluators in this business. It has almost tripled the number of evaluators in the network after ensuring that they have experience especially in used cars who can evaluate the vehicle, refurbish, make it to the Volkswagen standard in terms of quality and sanitisation and then eventually moving the vehicle for sales. 

Volkswagen also has a very structured process and a 360-degree approach that looks at benefits, specialised Das WeltAuto excellence centres for used cars, used-car warranty, refurbishment with genuine parts, financial services all under one shop. 

"We are looking at doubling the business in the used-car segment from the level achieved in 2019. Our focus will be to sell more than what we sold last year – 20,000 used cars," said Knapp.

It has 105 outlets in the country, which are fully digitised, to sell used cars. "We also see a upsurge in inquiries from the customers due to the lockdown situation. On our digital platform, we see more and more people asking for used car offers. We have a website for used car as well where we have seen an increase in the queries from the customers. We will understand this better once the lockdown is lifted," he added.

The company is expecting overall used car business in the country to be around four million cars and that is almost double of the sales volume. It also expects that the sales to go up around 2.5 million cars in the upcoming years and there would be a major jump in the used cars. 

"We see today already that with used car business we expect to be around 4 million cars and that is almost double of the sales volume. There is a tremendous opportunity in the future too. You will see around 2.5 million cars in the upcoming years and you will see a major jump in the used cars, that is pretty clear. "

Volkswagen has seen significant development in China as they are a couple of months ahead of India. The trend is that people are opting more for individual mobility where they are using their own vehicles instead of public transport. Another trend is that people are trying to avoid crowded places. A third trend is that there is a major push for online sales of cars and people are more inclined towards contactless solutions and services. 

"Basis our experience in China after the lockdown was lifted, what we noticed was that after 6-7 weeks we were back to normal business and in our workshops and our intention is the same for India," he added.

The company is in the process of sanitising all its network offices and training its dealer partners and have created clear guidelines as to how to sanitize the dealerships every hour. It has also taken the initiative to digitise everything including sales and services. The customer can book the service through online and the expert will pick up the vehicle and deliver it back after necessary services.

It is currently looking at ensuring that its dealer partners are carefully looking into sanitisation standard as it has established clear guidelines as to what they must do. For instance, the dealership must be sanitized every hour. Every two hours, the entire workforce must keep checking the body temperature of staff. Everybody should wear gloves and masks. The company has around 10,000 people working in its dealership for Volkswagen and multiple pair of reusable masks are provided to them. 

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