Volkswagen Financial Services is closing the car portal HeyCar in Germany and the UK. Expectations were not met and costs were far too high.
Volkswagen Financial Services (VWFS) is closing its car portal HeyCar. The decision affects operations in Germany and the UK. HeyCar was launched in 2017 as a digital platform for car trading.
The platform was to compete with big players like Mobile.de and AutoScout24. The goal was to sell new and used cars online across brands. Several car manufacturers were involved from the start.
Volkswagen, Mercedes and later Renault were co-owners. The German insurance group Allianz also owned a share. But the platform's expectations were not met, according to VWFS.
A spokesperson from VWFS confirms the closure to trade media such as Kfz-Betrieb and Automobilwoche . The management points to several reasons for the closure. Among other things, the development in consumers' digital purchasing behavior was overestimated.
At the same time, marketing costs were underestimated. They had also hoped for greater participation from car dealers. This did not happen to a sufficient extent to make the platform sustainable.
Financial challenges and change of ownership
The shareholders have decided not to provide HeyCar with further financing, the spokesperson confirmed to Automobilwoche. The company has been struggling with problems for several years.
HeyCar was once active in Germany, the UK, Spain and France. A planned launch in the Netherlands in early 2023 was dropped. This coincided with the hiring of a new CEO.
In August 2023, HeyCar closed its operations in Spain. This was another sign of the problems for the car platform. Mercedes-Benz sold its stake in May 2023.
Earlier this year, in January 2023, HeyCar announced layoffs. In June of the same year, additional employees were laid off. The company's finances were under pressure.
Volkswagen itself launched a separate marketplace for dealers in Germany in July 2023. This happened, among other things, because too few dealers were using HeyCar actively enough.
Competition and failing dealer support
The new VW platform was developed in collaboration with a consortium of German Volkswagen and Audi partners. These partners later entered into a partnership with the large used car platform AutoScout24. This increased the pressure on HeyCar even further.
The competition in the online car sales market is intense. Established players such as Mobile.de and AutoScout24 have a strong position in Europe. HeyCar failed to gain the necessary foothold.
The closure in Germany will take place during the month of May. The closure in the UK will follow in the coming months. This marks the final end of HeyCar's ambitions.
The decision highlights the challenges of establishing new digital business models, especially in a mature market with strong, established competitors. The investments and patience of the owners eventually ran out.
Volkswagen is not the only one that has recently had to abandon very expensive digital ventures. During the corona pandemic, a similar portal flourished, but when the infection subsided, the business model collapsed. Read more about it here .
