Car dealership in Rheda-Wiedenbrück, Westphalia: Volkswagen dealers demand higher commissions in the agency model.
(Photo: IMAGO/Future Image)
Dusseldorf The Volkswagen Group and its German sales partners are fighting over commissions. More than 800 dealers of the brands VW, Audi, Skoda and Seat demand more money for their services when they sell vehicles on behalf of the group.
According to the accusation from dealer circles, the sales partners could not survive in the long term with the commission models proposed by VW and the other group brands. Planned changes in the used car business are also a danger for small and medium-sized dealerships.
The trigger is the introduction of the so-called “agency model”. The brands from the Volkswagen Group want to sell their new electric models on their own account and only use the dealers as intermediaries (“agents”). So far, the vehicles have been sold in the name and on account of the dealers.
The switch to agency sales is currently being discussed in the entire automotive industry – and not just at Volkswagen. With the foreseeable end of the combustion models, vehicle sales in the name and on the account of car dealers would be phased out completely in a few years.
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With a fixed commission for every electric car sold, Volkswagen wants to compensate its dealers for their work. According to company circles, the dealers have been suggested six percent of the list price of an electric car. However, the German trading partners do not want to be satisfied with this. They require at least eight percent, which is significantly more, according to reports from Volkswagen circles.
VW: Dealers do not want to accept the offer
“We cannot accept the ideas about the agency business currently prevailing in the Group,” said Dirk Weddigen von Knapp, President of the Association of German Volkswagen and Audi Dealers (VAPV). Last week, the partner association called for an extraordinary meeting of members in Hanover, which was also attended by Skoda and Seat dealers.
The assembled trading companies unanimously rejected the commission models of the Volkswagen Group. The association then spoke of “a clear signal of unity across the entire organization”. In further negotiations, a higher remuneration for the car dealers should be negotiated.
“The available offers, the described remuneration ratios, tasks and risks are not adequate. This means that we cannot work sustainably and in the well-known quality of the most successful trade organization in Germany,” added Alexander Sauer-Wagner, spokesman for the VAPV management.
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The entire automotive industry is watching very closely what turn the dispute between the dealers and the market leader Volkswagen takes. The German Motor Trade Association (ZDK), the interest grouping of all German car dealers and workshops, had therefore commissioned an expert opinion to examine Volkswagen’s commission requirements.
Planned changes in used car sales are also causing irritation among the medium-sized car dealerships of the Volkswagen Group. According to this, transactions with so-called “leasing returns” are to be processed primarily via the Group’s finance and leasing subsidiary, Volkswagen Financial Services.
The used leasing vehicles, an important part of the business model for a number of medium-sized companies, would thus be withdrawn from their direct access. The dealer association also does not want to agree to these plans. “Instead, marketing should take place via the German brand organizations,” demanded association president Weddigen von Knapp.
Volkswagen wants to stick to the “agency model”.
Volkswagen reacted cautiously to the demands of its German car dealers. “The group takes the current statements from the partner associations on the ongoing negotiations about the agency model for fully electric vehicles very seriously,” said a group spokesman on request. The new agency model is essential “to ensure a contemporary and consistent customer experience between the online and offline world”. It offers manufacturers and retailers sustainable prospects for the future.
The agency model has already been introduced successfully and with the consent of all partner companies for the Volkswagen Passenger Cars and Cupra brands in Germany. “It is important to us that the implementation of the agency model is also successful for the other brands mentioned,” added the spokesman.
There will be further talks on this in the coming weeks, and Volkswagen will provide information on the results in due course.
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