Volkswagen logistics car park
The next price increase at the Wolfsburg-based car manufacturer is due at the beginning of March.
(Photo: dpa)
Düsseldorf The January result was miserable: the Volkswagen Passenger Cars brand sold just 34,000 cars in Germany in January, a decrease of 30 percent compared to the same month last year. Nevertheless, the declines did not prevent VW from turning the price screw again at the beginning of March. The last price increase in Germany took place in May 2020.
“Specifically, the prices for models and engine-gearbox variants increase by an average of 1.5 percent,” says a letter from the VW Group to its dealers, which is available to the Handelsblatt. In May of last year, the price increase was two percent. Now, for example, the small car Up is said to be 1.2 percent more expensive, for the Passat family the premium is 1.7 percent.
As in previous years, Volkswagen justifies the price increase with inflation, which the company passes on to customers. Completely new, however, is an environmental component that leads to a differentiated price increase for the individual VW models.
“With the consistent implementation of the ‘Volkswagen Way to Zero’, the price adjustment will be CO2-oriented for the first time,” writes the VW Group to its German dealers. In concrete terms, this means that the more carbon dioxide a single model emits into the atmosphere, the higher the price increase.
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The “Volkswagen Way to Zero” stands for the strategy of the entire group with which VW wants to become a completely CO2-neutral company by the year 2050. In business circles, the plans for the new type of price increase were confirmed. The company did not want to comment on any details.
VW is switching to electric company cars
VW dealers are now preparing for the fact that large and heavy vehicles will be hardest hit by the upcoming price increase. “We expect up to four percent for the large combustion models,” said a dealer from southern Germany. Volkswagen has not yet completely submitted the new and modified price lists. E-models would be preferred at the expense of diesel and gasoline vehicles.
The new electric models such as the ID.3 and ID.4 from Volkswagen have been classified as CO2-neutral vehicles. In line with the new carbon dioxide orientation, Volkswagen wants to exempt it from major price increases. There is currently no regular pricing on the market for the new electric models anyway. This is due to the high, predominantly state subsidy, which can amount to up to 9,000 euros for new e-vehicles.
In the first month of the new year in Germany, Volkswagen delivered a good three times as many electric cars as in January of the previous year, despite the sharp decline in the overall market. For VW sales director Klaus Zellmer, this is a confirmation of their own strategy. “Our e-mobility offensive continues to pick up speed,” he said.
In-house, too, Volkswagen is trying to decisively increase the proportion of electric vehicles. The company’s own fleet of company cars, which makes up tens of thousands of vehicles in Germany alone, plays a key role. At the end of last year, VW employees were encouraged to order more e-models as company cars. Several thousand ID models have also hit the streets as a result.
Dealers fear a drop in sales
The price increase announced by the group has met with little approval from its own dealers. After the bad start in January, higher prices may have created additional reluctance to buy, according to retailers. German VW dealers are currently suffering primarily from the consequences of the corona pandemic and the associated closure of their operations.
“We need the opening of the trade, and that immediately,” said Dirk Weddigen von Knapp, head of the German Volkswagen and Audi partner association. It is becoming increasingly unlikely that his industry will be able to achieve similar sales results in 2021 as in the corona-free year 2019. The order backlog and the number of registrations are already around 30 percent below the results from the beginning of 2019.
The current lack of chips is causing further uncertainty in the car market. Because there have not been enough semiconductors for the automotive industry worldwide since December, almost all vehicle manufacturers have to cut back on their production. At Volkswagen alone, this could mean that between 100,000 and 200,000 cars cannot be produced in the first half of the year. The traders fear that supply gaps could arise that will burden their operations even if the corona restrictions come to an end.
As the spring progresses, other automakers are likely to follow the example of Volkswagen and follow suit with their own price increases. The VW Group is the market leader in Germany. The foreign car brands in particular are based on the Wolfsburg car manufacturer.
More: The hunt for the super battery: This technology is supposed to solve the problems of electromobility.