Satellite Dealerships to Expand Volkswagen’s Footprint in Canada

Published on May 24, 2022 in Dealers by Guillaume Rivard

If you build it, they will come. That’s what the executives at Volkswagen Canada are thinking as they hope to expand the company’s footprint in the country and simultaneously increase its market share, which currently stands at 3.6 percent.

While one of the largest car companies on the planet, Volkswagen has a relatively small number of dealers in Canada with 145. By comparaison, Toyota (287), Honda (237) and even Mazda (163) have more.

Volkswagen Canada is thus counting on its dealers to open satellite dealerships in parts of the country where customers don’t have access to the brand. According to data from IHS Markit, 19 percent of Canadians live more than an hour from a Volkswagen dealership.

Michael Ricciuto, director of network development, explained to Automotive News Canada that these new locations will be smaller in size (approx. 7,500 square feet instead of 11,000) and staff. They will also have a simpler look and won’t perform major repairs to vehicles.

Volkswagen has already successfully implemented this business model over in Europe. Will it work here as well? We’ll see. The company says it has commitments for 24 of the 25 satellite dealerships that are initially planned. A fraction of them will focus on electric vehicles. The timetable is not finalized yet, but not all locations will be ready to open before 2025.

Photo: Volkswagen

Meanwhile, during a visit to Canada a few days ago, Volkswagen of America CEO Scott Keogh had no investments to announce. The $7.1 billion USD (nearly $9 billion CAD) over five years that were promised back in March will go to the U.S. and Mexico exclusively.

However, Keogh reminded Canadians that the Chattanooga, Tenn. assembly plant will start to build ID.4 crossovers for the entire North American market later this year, which should significantly reduce delivery times (they can be as long as two years in some cases). Production capacity will increase, and adding a line for the ID. Buzz van is also part of the plan.

Watch: Volkswagen ID. Buzz Unveiled for Europe

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