Edgar Estrada
Director General
Volkswagen Brand Mexico
View from the Top

Improved Processes, Sustainable Future Pillars for Recovery

By Alejandro Enríquez | Mon, 10/04/2021 - 09:00

Q: Volkswagen is one of the three highest-selling brands in the Mexican market. What is behind this success?

A: Volkswagen is the third-largest brand in Mexico with a 10 percent share of the automotive market. We have a 65-year legacy in the country and have been part of the lives of all Mexicans, whether through previous or new models.

The automotive industry is going through significant challenges but we have put 2020 behind us. Despite the circumstances, we continue to meet our customers’ expectations and provide them safety, efficiency and state-of-the-art mobility, fueled by innovation. Our strategy is to adapt ourselves to what consumers are looking for, from the very first sales contact to the aftersales. We reinvent ourselves daily. The past 65 years are not just a legacy but a sign that Volkswagen knows how to adapt, innovate and interact with customers.

Q: How do you maintain a close relationship with both customers and dealerships?

A: These two are the pillars for the brand. The end-customer who drives a Volkswagen every day is our target. We have several tools and channels to listen to the customer in a clear, simple and direct way. Social media, customer satisfaction surveys and other communication channels enable almost instant feedback.

Over the past three years, we fully revamped our approach to the customer’s journey. As a brand, we have worked to create a journey focused on the present and the future of mobility. On Aug. 26, we will open our Volkswagen City store, a never-before-seen concept in North America and the fourth of its kind in the world. It will generate a much more digital and appealing journey thanks to augmented reality. Volkswagen City store is a unique experience that will support dealerships.

Our investors also play a fundamental role so we plan to consolidate our dealership network rather than expand it. Our priority is that investors in the Volkswagen brand become more efficient, profitable and productive. We promote a respectful, close and hard-working relationship where communication is key.

Q: What are the most critical elements of the customer journey?

A: One of the fundamental aspects of the customer journey is information. We are working to provide customers all the information they need to make the best decision. Technology and innovation allow us to provide real-time information. On our website, our AI assistant Volkie helps customers every step of the way. QR codes also enable quick access to all brand data and through our One Hub, customers can experience the inside and outside of the vehicle through augmented reality. Customers no longer need to go to a physical location to experience the vehicle; they can fall in love and start their journey with Volkswagen remotely.

Q: How are you supporting sustainable and shared mobility solutions?

A: Shared mobility is part of the evolution of the industry and will eventually arrive everywhere. We need to generate alternative mobility models that serve everyone and are useful for the individual too. Car-sharing was advancing quickly in big cities until the pandemic. Megatrends and the circumstances of each city influence trends but the sector is focusing on working toward a more sustainable future.

Volkswagen created a Way to Zero strategy to work toward a zero emissions future. The deployment of this strategy will vary from market to market but at its core is sustainable mobility for society.

Q: How will you introduce the Way to Zero strategy in Mexico?

A: Way to Zero is a comprehensive strategy that involves more than the vehicle; it involves the way we manufacture our products and conduct our processes. For example, at one of Volkswagen’s largest factories – located in Puebla – 80 percent of its electricity comes from wind energy.

Electric mobility is also a must for Volkswagen and we are advancing quickly. We launched the electric SUV ID.4 in the US, for example. But EVs do not arrive alone; they arrive hand-in-hand with the sufficient infrastructure for safe and trustworthy mobility, which requires significant investment from both the public and private sectors.

Volkswagen’s brands are allying with other companies to expand the country’s EV infrastructure and pave the way for these vehicles to land in Mexico.

Q: How is the automotive industry working toward a recovery?

A: We face a common challenge as a sector, which is the shortage of some components needed to manufacture our vehicles at the volumes necessary to meet the needs of the market. We have not met the demand, given that we are not producing at 100 percent capacity. Semiconductor shortages are a global crisis. In August, they hit Volkswagen’s stock price and market share but we are confident we will recover in the coming months.

However, the pace of the automotive sector’s recovery is faster than we expected, which shows the strength of the market. The automotive market is seeing a solid recovery and will likely experience growth in 2021 and will surely grow in 2022.

Q: How are you securing your position in the very competitive Mexican market?

A: Mexico has more brands than the US but a smaller market, showcasing the strong competition brands face locally. Differentiation can be achieved in two ways. The first is through the product and Volkswagen’s DNA is state-of-the-art innovation and vehicles. The second is through the customer experience. The Mexican market is one of the most competitive in the world and that makes it interesting.

Volkswagen is Mexico’s third-leading brand in the light-vehicle market, with a 10 percent market share and 65 years of history in the country.

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst