Volkswagen happily announced that 100% of its retail partners in Germany have signed the agreement for the new agency sales model for the upcoming all-electric ID. family.
The new approach envisions a seamless switch between online/offline channels possible during the buying process because the cars will be purchased directly from the manufacturer, while dealers will remain involved as agents (receives a commission from Volkswagen).
It seems like a very smart move (win for consumers due to flexibility, win for the manufacturer due to higher control over the product, and a "significant financial relief for dealers"), not only to popularize the Volkswagen ID.3 and following EVs, but also in the present time.
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One of the most important changes is that Volkswagen will now decide on the vehicle price instead of "complicated price negotiations" at a dealer level.
"The agency model lays the contractual foundation for integrating online business and showroom-based business. From sales launch, customers can order vehicles from the ID. family direct from Volkswagen. At the same time, they select their preferred dealer for personalized customer care and local services.
Under the new model, dealers assume the role of agent for selling cars to private customers and small commercial enterprises. They look after acquisition, sales consultation, organizing test drives, transaction processing and vehicle handover in coordination with Volkswagen. The preferred dealer chosen by the customer at the beginning of the sales process receives the same commission and bonus as in showroom business, even if the vehicle is purchased online direct from Volkswagen. Volkswagen decides on the vehicle price, thus dispensing with complicated price negotiations. Dealers can therefore count on calculable compensation regardless of whether the customer buys their vehicle online or in the showroom."
"Volkswagen also takes responsibility for vehicle financing and bears the returns and residual value risk. As Santel explains: “The dealer no longer has to finance vehicles in advance. We also bear inventory cost and the costs associated with showroom vehicles. We are offering dealers an extremely attractive leasing concept for demonstration vehicles.”"
Volkswagen: The customer is able to switch seamlessly between online and offline channels during the buying process (example of a customer journey and touchpoints).
In other countries, sales will continue as usual, at least for now.
All Volkswagen retail partners agree new sales model for ID. family
- Agency agreement signed by 100 percent of retail partners
- Customers can buy direct from Volkswagen, dealers remain involved
- Seamless switch between online/offline channels possible during buying process
- Sales model applies in Germany to vehicles from the all-electric ID. family
- Holger B. Santel, Head of Sales Germany: “Strong signal for the future”
All Volkswagen retail partners have signed the agreement for the new sales model for vehicles from the all-electric ID. family. The sales launch of the ID.3
marks the start of the agency model for private customers and small commercial enterprises that has already proven its worth for major customers over many years. The benefit for customers: They can switch seamlessly between online and offline channels and order direct from Volkswagen, while their preferred dealer remains their local contact. The dealer assumes the role of agent under the new model and receives a commission from Volkswagen for this service.
The agency model lays the contractual foundation for integrating online business and showroom-based business. From sales launch, customers can order vehicles from the ID. family direct from Volkswagen. At the same time, they select their preferred dealer for personalized customer care and local services.
Under the new model, dealers assume the role of agent for selling cars to private customers and small commercial enterprises. They look after acquisition, sales consultation, organizing test drives, transaction processing and vehicle handover in coordination with Volkswagen. The preferred dealer chosen by the customer at the beginning of the sales process receives the same commission and bonus as in showroom business, even if the vehicle is purchased online direct from Volkswagen. Volkswagen decides on the vehicle price, thus dispensing with complicated price negotiations. Dealers can therefore count on calculable compensation regardless of whether the customer buys their vehicle online or in the showroom.
Holger B. Santel, Head of Sales and Marketing Germany, commented: “All our partners are now 100% on board. Broad approval from our retail partners for the agency model is a strong signal for the future. From the customer’s perspective, Volkswagen and retail become one unit with the agency model. And this seamless, coordinated shopping experience at all touchpoints is exactly what our customers want.”
Volkswagen also takes responsibility for vehicle financing and bears the returns and residual value risk. As Santel explains: “The dealer no longer has to finance vehicles in advance. We also bear inventory cost and the costs associated with showroom vehicles. We are offering dealers an extremely attractive leasing concept for demonstration vehicles.”
Dirk Weddigen von Knapp, Chairperson of the Volkswagen and Audi partner association, said: “The agency model brings significant financial relief for dealers, and that is particularly important at the present time. Our partners can therefore focus on what makes retail so indispensable: personal, competent customer care. I am delighted that all partners have signed the jointly drafted agreement. That is confirmation of the great trust in the agency model and our association.”
The agency model also responds to growing customer demand to switch seamlessly between online and offline channels during the entire buying process. Subject to the customer’s consent, available data on the customer and their vehicle is used to communicate with them individually and consistently across all touchpoints. “Thunder”, the new IT system, is being developed and will debut at dealers with the launch of the ID. family. The configuration process is being simplified, too: It will only take ten clicks to configure the entire vehicle.
