The decision was made after lengthy negotiations with dealer associations, which criticized the agency model from the beginning. Volkswagen's sales director Martin Sander confirmed to the publication that the company is returning to the classic scheme. According to him, the entrepreneurial potential of dealers cannot be replaced by another sales model. The exception remains only for corporate clients — there the agency model will remain.
Volkswagen implemented the agency model in 2020, inspired by Tesla's approach. The manufacturer set prices itself and assumed financial risks, while dealers received a fixed commission and effectively acted as intermediaries. The company aimed to standardize sales, reduce costs, and achieve direct contact with customers.
In practice, the system proved problematic. Volkswagen had to adjust the balances for thousands of electric vehicles that were not sold on time, and the expected simplification of processes for dealers did not occur. The parallel existence of two schemes added additional complexity: internal combustion engine vehicles were sold under the old model, electric vehicles — under the new one. Sander now admits that such separation only complicated the work.
Despite this, as early as spring 2024, Volkswagen discussed the possibility of extending the agency model to internal combustion engine vehicles as well, hoping to reduce sales costs by about 10%. However, dealer resistance continued to grow, and the company decided to reconsider the approach.
Volkswagen is not the only car manufacturer that has adjusted its strategy. Land Rover suspended the implementation of the agency model in the UK, BMW took a wait-and-see position, and Ford decided not to rush changes in the European market.
Source: Handelsblatt
