Watch: VW's Anu Goel on strategies for dealing with uncertainty and the impact of tariffs on parts and service
Anu Goel, executive vice president, group aftersales and service at VW, discusses how automotive supply chains have adapted to address uncertainty since the US' introduction of tariffs at the beginning of the year.
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This year has been nothing short of turbulent for supply chains, with some of the biggest challenges for the sector coming from the uncertainty surrounding tariffs and international trade. Speaking on the Red Sofa at Automotive Logistics and Supply Chain Global, Anu Goel, executive vice president, group aftersales and service at VW, reflects on how the industry has dealt with uncertainty since his last appearance on the Red Sofa just days after so-called "Liberation Day".
"I remember Liberation Day very clearly," Goel remarked. "I think that uncertainty still exists today, I think the difference is we have learnt to deal with uncertainty."
He identified some of the major learnings to come out of the past six months, including the importance of flexibility, urgency and redundancy. "The cost of redundancy today is less than the cost of reacting after the fact in this level of uncertainty," he stated.
Tariff impact on parts and service
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Asked about the impact of US tariffs and the associated uncertainty on the parts and service aspect of the automotive supply chain, Goel replied: "The simple answer is tariffs add cost. You have to decide as a company what your priority is. We have decided that continuing to provide service parts is priority number one."
Although he identifies that there may be no real cost levers that offset the full burden of the tariffs, Goel acknowledges the role localisation can play in making the supply chain more cost-efficient. "We are in a huge push towards localisation," he said.
He spoke of one critical difference between how the parts and vehicle supply chain have reacted to the tariffs: "We made the decision to slow down the vehicle supply chain to buy time to let things settle... but on parts from day one, we said keep the supply chain moving, do not slow it down, and if need be, accelerate it."
Parts and service priorities
Outlining top priorities for parts and service at the moment, Goel notes that one goal that "is tough to do, but [VW] is trying" is to achieve higher levels of transparency upstream in the supply chain. "The level of supplier uncertainty, what we call a supplier watchlist, is off the charts these days – it's three to four times the number of suppliers we've had in the past that we do not have transparency to their viability going forward because they're impacted by all of this as much or more than we are," he said.
"So, we've worked to get upstream tied into what we call watch list supplier to ensure we have something going, and if we don't, we got to work with purchasing to find alternative sources," he added, touching on independent aftersales. "We are starting to look at alternative sources that in the past we never would have looked at."
The next generation of service
Looking ahead to the next five years, Goel shared his hopes for the company in terms of service: "I would hope that the Volkswagen Group continues to maintain customer service is number one and we continue to main our order-to-delivery service for all dealers at the same level."
"I think a couple of things that could happen is we could have segmented or differentiated service," he added, pondering if all dealers need overnight delivery, for example. "The second thing I think... [is] what do you physically put in your building? As the number of models proliferates, the amount of sheet metal we have in our buildings is 40-50% of the space and that takes away from faster moving smaller parts... I think differentiated service for dealers is a topic that's on the table and I think differentiated service by commodity is on the table."
