Mike Todd, chief executive of Volkswagen Financial Services (VWFS), explores the ways in which car retailers can enhance their offering to help drive EV adoption.
With the influx of electric vehicles (EVs), cars will not need to be serviced as regularly, with services expected every two years. This means retailers have to find new ways to preserve income and maintain regular contact with customers. One effective way could be to ensure they have easy access to comprehensive and competitive care packages that include service plans and extended warranties.
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This will not only benefit retailers, but customers too.
In the highly competitive world of automotive, retailers are regularly in search of better ways to keep customers happy and revenue streams stable. To do this they need to be able to give customers the choice of a range of tools that can help build stronger relationships with consumers by keeping in touch with excellent service that also delivers peace of mind.
As the marketplace dynamics shift, and we spend more physical distance away from customers, this is especially important.
One major shift to our dynamic with customers – and this has been coming for years but has been accelerated by the pandemic – is the take up of EVs. This is progress for car manufacturers, car dealerships and car owners but the switch from combustion to electric doesn’t just change how we power our wheels – it alters how we service and maintain them too.
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By GlobalDataThe customer contact matter of EV
This change will inevitably have a big impact on the shape of costs to customers and retailer revenues.
EVs will require servicing only every two years, doubling the more traditional service intervals associated with diesel and petrol vehicles. This means fewer opportunities to show customers exciting new models.
And the growth of EVs is not the only factor changing contact with customers.
Evidence points to increasing numbers of consumers looking to keep their cars for longer as build quality helps ensure superior longer-term performance. In fact, according to figures from the Department for Transport the average age of a car in the UK at the end of 2019 was 8.3 years, which compares to just 7.1 10 years ago.
The opportunity in longevity
However, there is also opportunity to be found. Two thirds of our Sparking the Debate panel said that they had to research the cost to run an EV and 37% said they needed to investigate the servicing and maintenance costs associated with an EV.
Couple this uncertainty about EV costs with the increasing age of cars and there is a positive role for care packages, service plans and even extended warranties where servicing and repairs are covered in a monthly fee to guarantee protection.
This also serves as secured income for retailers.
These packages, such as those provided by VWFS, can be financed through a one-off payment or a smaller monthly payment option and backed by vehicle manufacturers. Lease&Care is another package that eases the minds of new EV owners to cover unknown costs.
By creating a package that includes regular services, breakdown cover and multiple year warranty cover for parts and labour for a low monthly cost, retailers can keep in touch and deliver reassurance to customers that the relatively unknown costs of EV are covered.
The role of the care package with its all-inclusive components should be front of mind for dealerships if they are looking to entice new drivers and convince existing ones to remain as valued customers.
Drivers can then be safe in the knowledge that whether it is getting to grips with EV car ownership or protecting their existing car purchases for longer, they can access a retailer-led solution that ticks all the boxes.
