Here’s How Volkswagen is Going Digital with an Online Sales Platform and Cloud Computing
As the 'People’s Car', Volkswagen has a reputation for solid and reliable traditional German design and manufacture. However, with cloud connectivity and online sales platforms, the Wolfsburg based company is set to leap headfirst into the 21st century.
Online Sales Platform
The car industry is not one which readily lends itself to online sales. For one thing it’s difficult to find a courier with a big enough van, but there are other, less facetious, reasons as well. A car is a big purchase, the second biggest after their house for most people, and this means they like to be able to see and touch it before deciding whether to hand over their money.
However, FAW-Volkswagen, (the joint venture between FAW Group and Volkswagen Group which manufacturers Audi and Volkswagen passenger cars for the Chinese market), is looking to buck that trend with an innovative new sales platform for its products.
The initiative has been driven by the needs of millennial customers. As this digitally savvy generation comes of age and becomes financially mature enough to start making new car purchases, it become ever more important for companies to meet their expectations. This generation wants great service and convenience and are more than happy to forgo a desirable brand if they can’t interact in their preferred way.
The new platform will enable FAW-Volkswagen customers to browse new and used vehicles, look up more information, and even buy and sell cars. Consumers will also be able to access the latest product information and receive smart recommendations using big data and AI software.
“The e-commerce platform is a key step in adapting to the digital era and contributes to the company's transformation from a traditional automaker into a modern travel solutions provider,” said Deputy General Manager of Commerce of FAW-Volkswagen, Dong Xiuhui. “People born in the 1990s have become the driving force in consumption in today's auto market and their digital demands pose new challenges to auto companies in the products they produce and the services they provide, according to FAW. We have made a series of digital changes in R&D, production and manufacturing.”
As well as the cars themselves, customers can also receive marketing communications, personalised recommendations for spare parts, maintenance plans, and invitations to special events.
Ahead of the official launch the platform was trialled with 888 limited edition VW T-Roc SUV models. The car has multiple personalisation options with a total of 5,298 different possible combinations. All 888 vehicles sold out in just ten seconds, demonstrating a market for online car sales, at least when it comes to special models such as this.
Cloud Connectivity
In another step on the road to digital transformation Volkswagen is looking to create the largest digital ecosystem in the automotive industry. To achieve this, VW is partnering with software giants, Microsoft to jointly develop the ‘Volkswagen Automotive Cloud’. The cloud will run on Azure, Microsoft’s proprietary IoT connectivity platform.
The cloud connectivity will be installed in new Volkswagen vehicles to allow for continuous updates and upgrades to be downloaded over the lifetime of the product. The €3.5 billion deal will also enable Volkswagen cars to be installed with apps and services which wouldn’t be possible with unconnected models. Huge tech brands, including Google, Uber, Lyft, Alibaba, Tencent and Baidu have all signed deals with car manufacturers recently.
New services accessible through the cloud will include charging and billing for electric vehicles, car sharing, ecommerce applications, and telematics. Telematics combines GPS mapping with on-board diagnostics to enable in-car assistance and fleet management for enterprise customers. Customers will also be able to link the service with other applications allowing them to check their calendar, make calls, and seamlessly continue playing music from the driver seat.
Volkswagen expects more than five million of its cars to be connected to the cloud by 2020, and Microsoft plans to hire an additional 300 engineers to assist in the cloud platform’s development and implementation.
“The strategic partnership with Microsoft will turbocharge our digital transformation,” said CEO of Volkswagen AG, Dr. Herbert Diess. “Volkswagen, as one of the world’s largest automakers, and Microsoft, with its unique technological expertise, are outstandingly well-matched. Together, we will play a key role in shaping the future of auto-mobility.”
Final Thoughts
Connected cars are still in their early days, but as the technology develops and even more services are incorporated, we are likely to see out vehicles becoming an extension of our home and work lives, rather than simply transporting us to and from them.
