Enlarge image
Red card for Volkswagen
: The trade does not agree with the group's sales plans
Photo: PR
There they were again, the red cards.
When around 800 car dealers of the brands VW, Audi, Skoda and Seat met in Hanover last week for an extraordinary partner association conference, they unanimously raised large red squares in the air.
The addressee was the Wolfsburg group, which wants to impose the so-called agency model on the dealers and prefer to sell the cars directly to the customers;
the mostly self-employed entrepreneurs would only act as intermediaries - and fear for their margins.
Not with us, was the message.
There were similar scenes in Hanover four years ago.
After the group had previously terminated the contracts with the VW partners, the entrepreneurs made it clear in mid-2018 with their rectangular red signs what they thought of the ideas.
Then as now, the chief negotiator on the part of the VW and Audi dealers was
Dirk Weddigen von Knapp
.
He has been President of the German VW and Audi Partner Association (VAPV) for seven and a half years.
Dieselgate, WLTP chaos, corona crisis, supply bottlenecks - the list of battles fought by the man in his mid-sixties in recent years is long.
Now the conflict about the agency model is escalating.
However, the dealer association has maneuvered itself into the current situation.
Because when VW introduced agency sales in business with private customers in autumn 2020 with the launch of the electric car ID.3, the association agreed in advance.
In the model, the customer concludes the contract directly with the manufacturer.
In this way, the car manufacturers want to eliminate the widespread high discounts in the trade, and the dealers receive fixed commissions for the delivery of the vehicles.
In addition, their financial risk is reduced because, for example, they no longer have to pre-finance cars – at least that’s the theory.
In practice, the VW dealers quickly lost acceptance of the agency.
At the beginning of the year, Weddigen von Knapp complained that the promised savings for retailers had not materialized and that the model was not sufficient for the companies.
After VW had initially paid the dealers a six percent margin per brokered ID.3, only four percent are now fixed, and a further two percent are linked to certain conditions.
Unacceptable for union prince Weddigen von Knapp.
Under the guise of the agency, Volkswagen wants to "save double-digit margins" in sales.
In addition, the group wants to use the model to attract the used car business through Volkswagen Financial Services AG, the dealers are outraged.
"The joint use of customer data should come to an end," warns Weddigen von Knapp.
"Our ecosystem with the fundamental involvement of the partner is being questioned."
So far, the agency has only been introduced at the core brand VW and the Seat subsidiary Cupra.
At Audi, Skoda and Seat, the trade does not want to make the same mistakes in the negotiations.
You are not fundamentally against the agency, but not on the VW terms.
Initial proposals from Audi, which apparently largely resemble the agreements at VW, could not count for dealers, explained VAPV Managing Director
Alexander Sauer-Wagner
.
At Volkswagen Commercial Vehicles, the dealers had introduced the agency for everything to do with the VW ID.
Buzz already blocked.
The point of contention was also the commission: "We were offered five plus two percent. A sample cost calculation was not submitted. The brand could not credibly show us how we should maintain our level of earnings with this remuneration," says Sauer-Wagner.
Volkswagen Commercial Vehicles gave in so as not to jeopardize the market launch of the electric Bullis.
For the time being, it will be sold in classic dealerships, the agency is to be introduced at a later date.
Volkswagen sees "the best prospects for the future" in the agency
Dealers and groups are also at odds with Skoda and Seat.
In the case of the Czechs, the dealer association around President
Thomas Peckruhn was able
to delay the start date for the agency model to January 1, 2024.
Until then, there should be many more rounds of negotiations.
And Volkswagen itself?
According to a spokesman, the group takes the dealers' statements "very seriously".
The agency model is "essential to ensure a contemporary and consistent customer experience between the online and offline world. It therefore offers retailers and manufacturers the best future prospects in the long term."
Further talks will be held with the sales representatives in the coming weeks.
It currently seems unlikely that Audi, Skoda or Seat will conclude a deal on terms similar to those of VW.
The VW/Audi dealer association is even hoping to be able to renegotiate with the group's core brand, Volkswagen passenger cars.
"I would like to make it clear that we do not want to question the contract per se. Let's keep what is right - but continue to clearly address the issue of 'remuneration and savings'," said Managing Director Sauer-Wagner to the around 800 participants at the conference in Hanover.
At Volkswagen, they block such ideas directly.
The agency was introduced at Volkswagen passenger cars and Cupra "successfully and with the consent of all partner companies", according to the spokesman.
Even some retailers doubt whether the red cards are enough to impress the manufacturers in the long term.
"Sometimes I think we should go on strike and stop ordering and delivering cars. They would probably give us a network termination right away and not in two to three years. But we would cause them huge problems with such a step," said one Entrepreneurs after the conference in Hanover.
In the back of their minds, some dealers certainly still have what happened after the last red cards for VW in 2018.
Surprisingly for many partners, there was a sudden about-face in the negotiations between the manufacturer and the dealer association.
The VAPV signed the new contracts - and is still struggling with the consequences today.