Volkswagen (VW) is expecting to generate around $1.1 billion in additional revenue by 2025, through the launch of a cloud-based marketplace that will sell additional vehicle functions and online services for connected cars.
According to Bloomberg, Jürgen Stackmann, VW’s head of sales, said the automaker expects revenue from connected vehicles to start coming in 2020. In fact, the company would like to connect its entire fleet through its partnership with Microsoft. The company also recently brought in a third partner, via its recent purchase of a controlling stake in fleet-connectivity provider WirelessCar for 1.1 billion kronor ($121 million USD).
This is VW’s latest move as it shifts focus onto its online business. The company announced in October that it was going to revamp its business to focus less on dealerships and more on online sales, and over-the-air software updates for its electric cars.
The new sales model is expected to go into effect in Europe by April 2020, and will enable seamless individual support beyond the purchase process. In fact, customers will be able to access a variety of services from the Volkswagen We digital ecosystem, such as We Park, We Deliver or We Connect. People who prefer to go to a physical location, though, will be able to choose from city showrooms, pop-up stores, service factories, used car centers or scalable full-feature dealerships.
“We believe in the new business model, as it will strengthen dealers’ entrepreneurial responsibility,” said Dr. Matti Pörhö, president of the European Dealer Council (EDC), which represents the interests of Volkswagen dealer councils in Europe. “In the areas of digitalization and eMobility, the major tasks for the future, dealers will play a key role. To shoulder these challenges, dealers need a firm foundation of profitability.”
Pörhö praised the fair and open cooperation with Volkswagen: “We actively participated in shaping the business model right from the start.”