It’s no secret that auto dealerships are a major bottleneck for EV sales. Legacy automakers may cast an envious eye on Tesla’s direct-to-customer sales model, but they cannot practically (or legally) cut the dealers out of the equation. Now Volkswagen may have found a way to solve this dilemma, at least in Germany.
VW has announced that its German dealerships will not be the primary point of contact for buyers of the new ID family of EVs. Rather, customers will place their orders directly with Volkswagen, and choose a local dealer, which will act as an agent. Dealerships will provide test drives, finalize transactions, and deliver the vehicles. Prices and dealership commissions will be fixed.
This neatly eliminates several of the problems with selling EVs through the traditional dealership model. Dealers will no longer have an incentive (nor will they have the opportunity) to steer potential EV customers to gas or diesel vehicles. Sales associates don’t need to become EV experts, or do the extra work required to sell an unfamiliar product. The salesperson hands over the vehicle, the dealership gets paid, and everybody’s happy.
“All our partners are now 100% on board,” said Holger B. Santel, head of VW sales in Germany. “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.”
The new model also offers financial benefits for dealerships. “The dealer no longer has to finance vehicles in advance,” Santel explained. “We also bear inventory cost and the costs associated with showroom vehicles. We are offering dealers an extremely attractive leasing concept for demonstration vehicles.”
“The agency model brings significant financial relief for dealers, and that is particularly important at the present time,” said Dirk Weddigen von Knapp, Chairperson of the Volkswagen and Audi partner association. “Our partners can, therefore, focus on what makes retail so indispensable: personal, competent customer care.”