“At Volkswagen, digitalization has been one of our core strategic pillars,” shares Steffen Knapp, Director, Volkswagen Passenger Cars India, in a recent interaction with People Matters. The pandemic has led to a further impetus on digitalization and several initiatives have been put in a fast track mode.
The auto sector had already been struggling since 2019, the pandemic further impacted the sector and brought new unknown challenges and great uncertainties for the future. However, with a deeper understanding of changing customer preferences, digital innovation and people-focus, Volkswagen strives to bounce back from the COVID-19 crisis.
Here are some excerpts from the interview with Knapp:
How has the pandemic shifted the landscape of the auto industry? What does the future ahead look like to you?
The Indian automotive industry had just begun recovering from a tepid market in 2019, due to the reduced demand, financial availability and transitioning of emission norms from BS IV to BS VI. As the industry witnessed positive growth, we were hit by the COVID-19 pandemic across the world. The pandemic has severely impacted global economies due to nationwide lockdown’s in India and other parts of the world.
But on the other hand, due to the COVID-19 situation, people’s trust in public transport has reduced and they’re now opting for affordable and accessible individual mobility options. The demand for cars has increased, especially in the pre-owned car business segment. As an industry, we’re witnessing changing customer preferences, due to the affordability factor.
The immediate future is challenging and we expect slow growth within the industry. However, we’re confident of the economy improving, in-turn positively impacting the demand of vehicles.
Our interactions have shifted via virtual platforms, giving customers the opportunity to choose and book their preferred Volkswagen vehicles online (sale and service products). Safety and sanitization has become a critical component, which needs strict adherence that would enable customer walk-ins at dealerships.
What has been some of your key business and talent priorities to manage the crisis and sail through it?
Our key priorities from the beginning have been – employees, dealer partners and customers. With a clear focus on ensuring their safety, peace-of-mind and comfort.
For our employees, we announced work from home a few days earlier from the nationwide lockdown to safeguard our employees from public transport and being susceptible to infections. We have continued to pay salaries to all our employees on time, with no job losses. Our teams are dedicatedly working from their homes without it impacting our business.
As an extended support to our dealer partners, we upfront provided them financial and infrastructure aid for them to timely pay salaries and retain their employees. Kept them engaged through virtual training, product refreshers, quizzes and business activities to keep their momentum high.
Further, to support our customers, we extended their existing warranty and service value package (maintenance packages) by a few months. This would enable them to utilize it at their convenience. Volkswagen introduced the online retail platform, allowing the sale of vehicles and service products. From an accessibility point of view, we launched our Das Welt Auto business (pre-owned cars) online wherein customers can buy and sell their pre-owned vehicles. To make Volkswagen cars even more affordable, we launched the Volkswagen Secure and Power Lease campaign, where customers wouldn’t have to worry about the peripherals involved in owning a car. And lastly, the #VWellnessIndia campaign, that ensures strict adherence to safety and sanitization measures at Volkswagen facilities.
How are you looking to resume work slowly? How are you resetting work to adapt to the new reality of work? What are some new initiatives you have introduced?
Mid May 2020, we resumed operations in-line with government guidelines. As on date, we have nearly 90% of facilities (dealerships & workshops) open basis local regulations. Our manufacturing plant in Pune and Aurangabad are operational along with our Mumbai office, limited staff.
While we’re encouraging our employees to continue working from home. For those required in office, we’re ensuring they travel by private transport or have organised a pick-up and drop service from their residence to office and back. All HR and admin processes are being taken to ensure the safety of our employees, mandatory wearing of masks and timely sanitization of frequently touched surfaces.
On the business front, we’ve introduced several digital initiatives giving customers the flexibility to engage with Volkswagen through digital platforms.
How has the pandemic impacted your digital transformation journey?
At Volkswagen, digitalization has been one of our core strategic pillars. Over the years, we’ve been strengthening our digital initiatives across our sales and service business. The pandemic has led to a further impetus on digitalization and several initiatives have been put in a fast track mode. The earlier mind-set of requiring a physical business model has gradually shifted. We have even shifted our marketing engagement towards digital platforms.
The new initiatives launched during the lockdown have been the online retail model comprising vehicles and service products. Our used car business, Das WeltAuto (DWA) has been launched online along with a Self-Valuator mobile application that allows customers to evaluate their pre-owned cars.
Do you think digital innovation is critical to survive and thrive in the new COVID era and beyond? How are you preparing your business and workforce for this digital innovation?
Digitalization has always been a critical factor in the automotive business, whether it’s used in manufacturing cars or offering a service at the dealership. The only difference in the post COVID era, is the implementation has been fast tracked. To maintain business continuity, there is a need for digital innovation. Online consumer goods purchases have doubled in the last three months, due to customers being sceptical about visiting a physical outlet. Similarly, our customers want the flexibility to purchase cars.
Internally, we’re training our dealership staff towards using digital tools whether it's showcasing a 360 degree view of their preferred vehicle on a mobile tablet. Or it’s about interacting virtually with a customer and catering to their queries or requirements.
At Volkswagen, we have launched the online retail model comprising vehicles and service products. Our used car business, Das WeltAuto (DWA) has been launched online along with a Self-Valuator mobile application that allows customers to evaluate their pre-owned cars.
Lastly, how are you dealing with this crisis? What are some personal challenges you think leaders often face in these tough times? How are you ensuring that you keep calm, sail through and help others also in these tough times? Share your tips.
During any crisis, there are many essentials for a leader. While, one needs to remain calm and composed on how to tackle the challenge ahead. Also, needs to be mindful of how to communicate the next steps to the team. On a daily basis, I would remove 30 minutes for myself in the early morning hours. I would write down the tasks at hand and the way I intend to approach it. The management team had organized 30 min of a task force daily and analysed the situation.
We set-up virtual town halls to discuss the strategy at hand and put forth our emotions and reinstate the confidence that we’re in this situation together. When we realised the anxiety is building, I had organized for coffee breaks, where we’d discuss informal topics.
Seeing their spirits, it would elevate my mood. Further, I would ensure to reduce screen time and would spend time with my family to stay calm and sail through.