Volkswagen shifts focus to digital; to double its marketing spend in CY2021

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Updated: Dec 03, 2020 11:24 AM

The company plans to allocate 30-40% of its spends on digital in CY21 as compared to 15-20% in CY20

The company plans to invest in sporting associations and influencer activation in CY 21The company plans to invest in sporting associations and influencer activation in CY 21

As consumers take to online shopping, several industries have moved online or are trying to move in an attempt to increase sales. German automaker Volkswagen plans to double its marketing spends on digital in CY2021, Abbey Thomas, head of marketing, Volkswagen Passenger Cars India, told BrandWagon Online. The company plans to allocate 30-40% of its spends on digital as compared to 15-20% in CY2020. “The kind of inquiries that we generate from digital activations are far higher than before. About 70-80% of the inquiries come to us from digital mediums. While digital accounts for 25-30% of the sales, currently,” Thomas said, adding that the company is investing in digitalisation of sales and service processes including after-sales services besides building a payment gateway. The company which had launched its online retail platform in April 2020 has so far integrated 137 sales and 116 service touchpoints.

The company claims that print and out-of-home medium will account for 30-35% of the overall ad spend. Additionally, it plans to invest in sporting associations and influencer activation in CY 21. According to Thomas, the business has returned to pre-Covid level and the market in the last two months has outpaced last year’s sales during the same period. “The last two or three months have seen growth as people are on the lookout for personalised transportation. This purchase could be a new car or a used car. Mainly the smaller cars are seeing a huge rush and one major area is the smaller sport utility vehicle (SUV) segment,” he explained. As per industry estimates, over 3.3 lakhs passenger cars were sold across segments in the month of October, the highest number clocked across the industry in years.

Given the growing demand for SUVs, the company plans to increase its focus on the segment — both in terms of marketing as well as product launches. Currently, the company offers three car categories in India, including SUV, sedan, and hatchback. “Today, customers prefer to start with an entry-level SUV over a hatchback. Customers no longer want to settle for less,” Abbey stated. The company had launched T-Roc in the SUV space in March which it claims was sold out within a couple of months. Moreover, it claims that the new SUV Tiguan Allspace has also received a good response in the market.

Read Also: How PepsiCo India cashed in on digital to drive engagement this festive season

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