Volkswagen Group Ireland profits from investing in aftersales and an electric future

Volkswagen Group Ireland (VWGI) and its brands have been a mainstay in the Irish car market for decades. With well over half a million of its vehicles in operation in the Republic of Ireland every day, keeping cars on the road is an enormous challenge.

Last year, VWGI recorded more than €100 million worth of parts and accessory sales through around 420,000 workshop throughputs via its Irish network of 84 dealers – a record year.

Volkswagen Group Ireland tells us that it invests heavily in its aftersales division and is proud of its certified technicians who ensure cars are kept on the road with the latest digital developments. VWGI’s state-of-the-art ‘National Learning Centre’ opened its doors in 2015 and that it is a centre of excellence for the next generation of technicians and high-voltage experts.

Facilities at its centre in Dublin 12 includes six training rooms for physical and web-based training, and a 12-vehicle bay workshop area. With a team of 10 professionals dedicated to training the next generation of vehicles technicians, it claims to be the largest automotive training facility in Ireland.

During a recent visit to the National Learning Centre, Eoin Cuttle sat down with Robert Guy, Director of VWGI Aftersales, and Vicky Halton, Head of VWGI Technical Service, to briefly discuss these and other topics.

EC: What level of challenges still exist for Volkswagen Group Ireland due to Brexit with regard to next day delivery of parts?

RG: We are now five-years post Brexit, and managing a €100 million supply chain is a complex task with numerous EU regulations and procedures being added all the time. But, despite this, 2024 was a record year for Volkswagen Group Ireland. One in four cars on Irish roads is a Volkswagen Group product, whether an Audi, Cupra, Seat, Skoda or Volkswagen.

The maintenance of these vehicles at our retailers requires next day delivery of genuine parts, to ensure minimum vehicle downtime and a five-star experience for our customers. These parts come from Germany via our sister company Volkswagen Group UK’s warehouse in Birmingham. Around 85 per cent of our trailers arriving into Ireland from Great Britain are ‘green routed’, meaning they do not require any checks on arrival. 92 per cent of our parts arrive the next day, so thankfully the customer hasn’t felt a hit in terms of availability.

However, Brexit has added about four per cent to the price of these parts, because we have to pay duty on the parts when they go from Germany into the UK, and of course further duty when they leave the UK for Ireland – and there’s no way around that.

Something we looked at in depth, was to establish a bonded warehouse in the UK, the recurring cost of which would have been £2 million. Volkswagen Group UK, which sells over £1 billion worth of parts and accessory each year through its 750-strong dealer network, told us that they’re not spending £2 million on a bonded warehouse when they don’t need to, as they already sell from a UK warehouse to dealers on mainland UK.

EC: Do you expect the well publicised major restructuring within Volkswagen Group in Europe and the planned introduction of direct selling model here in Ireland to have any aftersales impact on the delivery of parts and services to dealerships and Volkswagen Group car and LCV owners?

RG: No.

EC: As the VW Group brands continue to grow their respective electric vehicle ranges, what do you foresee will be the impact for dealer aftersales revenues (less moving parts), and what adjustments are you advising service departments to make to counter any potential fall-off in turnover?

RG: We need to continue to increase connectivity on electric vehicles, so when a service is due for brakes, suspension, tyres etc., those EV owners will be notified and come to our dealerships. VW Group has 90 per cent connectivity on its EVs in Ireland, while 12 per cent of service booking are currently done online – which may seem like a low figure, but this was pretty much non-existent three years ago.

Our dealers need to do two things: get better at targeting EV customers; and increase the parts sold for throughput. Of the half a million EVs currently on Irishroads, around 30 per cent are VW Group products, and we need to grow that to about 40 per cent.

When it comes to EVs, 12 per cent of our throughput in 2024 was electric vehicles, so our dealers have done an excellent job. If you were to ask me that question in 10 years time, I think my answer would be different, and EVs will eventually have an impact on dealer aftersales revenues. Clever dealers will branch out to have bodyshops for example, in order to get the crash repair business.

EC: Despite employment rates in Ireland hitting record highs near the end of 2024, skilled vehicle technicians are proving increasingly difficult to recruit, especially those approved to work on EVs. How do you see this critical aftersales issue being resolved?

VH: It is obviously difficult, but at Volkswagen Group Ireland, we feel that it is our job to attract people into our industry, and it’s something that we’re really passionate about. About four years ago we started to ramp up the number of trained high-voltage expert (HVE) technicians entering Volkswagen Group battery repair centres across the country, so we’re probably in a good position in terms of the expertise we actually have out in the network.

Even VW Group UK recently said we’re in good place here in Ireland in terms of competencies. We have also changed the pathway into becoming a HVE so young technicians can be more specialised. Before this the training path was to go from a full technician, then into diagnostic technician, then engine and gearbox, then diesel and petrol, and then into a high-voltage technician. So it’s great that we’ve been able to change the route to HVE. The same goes for specialising in the likes of infotainment or ADAS.

EC: How important has your National Learning Centre in Dublin been for Volkswagen Group Ireland in getting apprentices and technicians prepared for the future demands of your dealership’s workshops.

VH: One of our goals is to is to encourage more young people into the motor industry. When you qualify as a Volkswagen Group technician you can take your qualifications anywhere in the world.

For us, it’s about delivering today while planning for tomorrow. The automotive industry is undergoing rapid transformation, driven by advances in technology plus a shift towards electric vehicles and sustainable practices in the automotive industry. This evolution presents incredible opportunities for those entering the field, especially through apprenticeships that provide hands-on experience and in-depth knowledge.

We believe that fostering young talent is essential to the future of our industry. Our focus on future qualifications for high voltage technicians coupled with long term demand for qualified combustion engine vehicle technicians, there has never been a better time to be an apprentice in the motor trade.