Upheaval at VW Group in the UK as jobs go under review

Staff at the Volkswagen Group in the UK are bracing themselves for upheaval as the company undergoes a comprehensive review of its permanent roles ahead of a planned switch to direct sales.

The UK arm of the car maker is responding to “fundamental shifts” in the way it sells cars, including digital services and online sales, the company said in a statement to Autocar: “To enable the correct resource in developing these opportunities, Volkswagen Group UK is proposing changes to its organisational structure.”

The company is undergoing consultation with staff about future plans “with a view to any changes in our structure coming into effect later this year”, the statement read. All departments are affected, Autocar understands.

The VW Group directly employs around 800 staff in the UK, excluding Bentley, with many more working for external companies running the 1000 or so dealers selling VW Group cars. The company doesn’t anticipate any reduction in employee numbers following the review, a spokesman said.

The review will also not impact retailers. “This is about how we are structured internally to best support them in an evolving market,” the spokesman said.

The VW Group is moving to an agency model for electric cars, which means the company sells the cars direct to consumers, rather than wholesaling them to dealers. The dealers instead act as the VW Group’s agent and collect a flat fee for handling the transaction. The VW Group’s Cupra brand has said it will switch to the agency model and others are expected to follow suit.

Car companies are increasingly scrutinising their distribution model as they look to cut costs amid the shift to electric cars, which cost more than combustion-engined models. Stellantis, for example, said it wants to cut distribution costs by 50% by 2030 in Europe as part of its Dare Forward 2030 strategy, revealed earlier this year.

“The facts are that distribution costs are very high,” Stellantis CEO Carlos Tavares said in March. It is moving to a so-called retailer model, where it takes more control of the sale.

Ford CEO Jim Farley said earlier this month he believed the wholesale model cost the company “about $2000 per unit, more expensive than Tesla”. As well as overhauling the sales process, Farley also said he wanted to slash advertising costs.