Covid-19: For VW, crisis highlights old school values and new age strengths

Life under Level 4 has accelerated the biggest European distributor’s digital planning. How far might it go?

Can a major car brand really be run from a laptop? In times of needs must, the outcomes have been heartening.

 PANDEMIC lockdown has influenced a major car distributor’s view about the relative values of ‘clicks’ and ‘bricks’.

Like so many businesses, Volkswagen New Zealand has taken its office structure into the homescape since the country closed for business on March 26.

It might not be too much of a stretch to suggest that, as result of the shutdown and social distancing, this massive machine – it’s the largest importer of European automotive product – is operating from laptops on kitchen tables.

Enforced change has asked for fresh ways of working and thinking, plus accelerated reliance on online tools, some in the works for quite some time, one or two considered unnecessary in times of normality. The Covid-19 crisis has left no choice.

All in all, general manager Greg Leet has been impressed by how this unexpected needs must exercise is running. It has so cemented trust in systems and e-commerce approaches he believes what’s working has continued merit once all this over. “When we get back to work, it would be terrible if we did not take the learnings of these dramatic times along with us.”

Greg Leet.- the Covid-19 shutdown has taught a lot about digital operating systems and flexible working practices.

Does this raise broader discussion about brand-retailer-customer interactions. For instance, when we’re in a situation where it’s impossible for the traditional – that is, in basic terms, a customer going to to a showroom, is this now the time when more effort is required to essentially bring the showroom to them?

There’s no argument that, since we’ve been placed in our bubbles, we’ve become more computer-reliant than ever; web traffic in the past few weeks has soared to unprecedented level. Surely we’re not all watching funny pet footage?

All this has hit at a time when it’s hardly a secret that the car world is becoming increasingly reliant on digital solutions, with inevitability of more to come. As Leet puts it, what’s happening and being increasingly thought about right now is an acceleration of what was always going to be.

The exceptional circumstances of the moment have acted as a catalyst for consideration of change. No-one is under any illusions about the impacts of coronavirus, not just now but going forward. Any return to life as it used to be will be slow and measured.

Working through new potentials and opportunities has keep VW and its agents – in New Zealand, that’s Giltrap Group – brainstorming busily at corporate level, Leet acknowledges. Examining the fuller potentials of flexible working environments and technology leveraging has been fulfilling.

“What this (crisis) has done is allowed us to take stock of some of the future thinking that we’ve been working with. We have found opportunities from these challenges.

 “The customer journey is going to be, and should be, different as an outcome of what we have been going through. I think our dealers (also) have an opportunity to become more present in a customer’s environment.”

As to that. Whatever it entails, this hastened journey down the virtual highway won’t diminish the human element nor would it bypass the core historic destination: The established franchise network.

On the first, Leet says for all the merits of online, it’s been an incredible staff effort that has been key to keeping the brand on the road these past few weeks. All that starts at the top; family business, family values.

VW New Zealand’s usual home is this Auckland headquarters.

“There’s been a lot of discussion around ensuring our staff’s health and well-being. When these times come and when the chips are down, the values of an organisation really shine through … I feel pretty bloody lucky to be working in an organisation led by those guys (the Giltrap family). It’s just phenomenal. It’s people first, no matter what. 

While inaccessible to the public, the national franchise network has remained a stalwart; there’s been a lot going on behind those closed doors, within the constraints expected with Level 4.

“The contact between us and our dealers is still as much as it would be any other day. The content of our conversation, of course, is a little different. 

“But we are supporting and enabling them to make sure that their staff and customers are safe in their environment.”

For many students of automotive utopia, the ultimate undertaking might be an online purchasing platform enabling customers to configure and purchase new vehicles remotely.

That process has been toyed with before and found wanting by Toyota New Zealand, which had little luck some years ago when touting Prius and 86 editions that couldn’t be bought from a showroom.

Last week VW in Australia followed a similar route with a structure that makes every new VW model – including commercial vehicles – available to order online. As with the NZ experiment, the process allows buyers to configure their selection and lay down a deposit before a designated dealership takes over to the rest of the process. In Australia, once the deposit has been received, the dealership is in contact within 48 hours to complete the purchase and manage the vehicle delivery. Here legislation requires going to a dealership to sign a sales agreement.

Virtual showrooms as an adjunct to the actual thing increased development of on-line tools that already allow customers to assess and tailor a product they’re considering is an international emergent with potential, Leet says. Additionally, there’s a logic to enhancing those experiences during a time when social distancing makes anything more personal simply impossible.

In the same way, having ‘sales geniuses’ giving a tailored guided tour to a vehicle by video link, which Skoda in the United Kingdom has introduced in the past week as a way of limiting social interaction, is also a good idea even in times of normality.

“We are definitely thinking about those things and even, too, to the likes of how of internal training might look like from a video perspective.”

Cars are essentially computers on wheels already, and the advance to the electric ID models will just bring more digital engagement.

That has already begun, with VW NZ having provisioning ongoing sales and technical training by video link during shutdown.

Regardless of what can be achieved via e-means, the traditional still has a core role. Dealer outlets lend strength and fuel credibility and, as much as direct selling works for some products, vehicles are different, simply because of the emotional connect. See, touch, drive, talk.

Were it not for Covid-19, today’s showroom-centric chat would surely reference this week’s national introduction of a fresh brand stance, pitched around the new look logo from Germany first unveiled last September. Months in the planning, an effort that would undoubtedly have become subject to a lot more raa-raa were it not for the pandemic could not be diverted because of it.

Aside from the latest badge that, the brand says, has reduced to its essential components and with a new flat 2-D look to become “perfectly recognizable in a digital landscape”, this brand design exercise includes a new female brand voice, a new website, and a complete overhaul of each local dealership, set to be implemented in the months to come.

That a roll out theming to new beginnings has timed just when coronavirus is costing the parent a staggering $US2.2 billion in lost revenues every week is wholly happenstance, yet poignant nonetheless.