volkswagen id.4 production

VW’s dress code to blame for ID.4’s weak China sales, claims analyst

Produktion des VW ID4 / ID Crozz am 18.09.2020 bei Volkswagen Sachsen in Zwickau . Credit: Oliver Killig

Volkswagen is going all-in on the ID. 4’s promotion in China, but the all-electric crossover from the veteran German automaker is still yet to find some solid footing in the country. This, at least according to an analyst, is partly due to the fact that Volkswagen’s employees dress too conservatively compared to staff from rivals like Tesla and NIO. 

Before coming to his rather unique theory, Stifel analyst Daniel Schwarz dispatched some mystery shoppers to Volkswagen dealerships as well as Tesla and NIO stores. And according to the analyst, the mystery shoppers’ experience in Volkswagen’s dealerships was very different. The German company’s staff were dressed very conservatively, for example, and Volkswagen’s workers were not as energetic as those in Tesla and NIO’s stores. 

“Clearly, the dealerships at VW look older than at Tesla or Nio. The sales personnel at Tesla/NIO are younger and were perceived as ‘more energetic and more confident’ than VW’s sales personnel — the mystery shoppers were stressing this very much, also that it influences the buying decision,” Schwarz noted

Whether this theory from the analyst is true or not is up for question, but Volkswagen’s sales of the ID.4 have been lagging in China. As per a report from Reuters, Volkswagen only sold about 1,200 ID.4s in China in two months despite a robust and assertive marketing push. In contrast, Tesla sold over 6,000 Model Ys in the first two months after its local launch, and that’s with Giga Shanghai’s production lines barely coming out of their trial phases.

Interestingly enough, Schwarz’s theory seems to be a somewhat valid point for VW itself. Stephan Wollenstein, head of sales strategy, noted in a July 29 earnings call that improving Volkswagen’s China operations is an important endeavor. He also referenced the company’s robust dealership network as an edge against competitors in the market. 

“We aim for a network across both joint ventures of roughly about 150 of such prime locations in high-frequency areas in China, where also our competitors are now presenting their cars, which would be a similar-sized network as also the NEV-only brands have. 

“On top of that, we have our natural strengths with our established 2,000-unit dealer network, which, of course, is able to deliver a first-class service, which some of our competitors are certainly not able to reach because simply of the maturity in the market,” Wollenstein said. 

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VW’s dress code to blame for ID.4’s weak China sales, claims analyst
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