The rate at which people shop online has skyrocketed in recent times and it’s in fact the default mode of purchase for many people all over the world. This is probably why some new companies springing up had decided to follow this model as more and more people are pouring onto the internet.
Volkswagen in fact wants to take advantage of this as well as it announced yesterday that sales for its ID family of electric cars will be much more online-based. So with that clarified, any ID Vehicle admirer won’t be needing to walk in to any physical dealer shop any longer but can just place their order online directly from Volkswagen at which point they will be prompted to select the preferred dealer as a local point of contact kn order to track and receive their car.
With this, dealers will become “agents” but will continue to receive the same compensation and commission that they would under the old way of dealership. But this time around, their job will not be “sales-focused” but more of a consultation, handling test drives and vehicle handovers.
There are plenty of benefits to this new sales model for both dealers and customers alike. Customers won’t have to sit through a frustrating sales pitch when they already know what vehicle they want, and dealers can rely on a consistent, “calculable” commission because the vehicle’s price will now be set by Volkswagen — there are no surprises.
In addition, Volkswagen says it will take on the burden for vehicle financing aside bearing inventory costs and the “costs associated with showroom vehicles”. So Volkswagen seems keen to reduce the financial burden for dealers while encouraging them to take on more customer service-oriented role in the sales process which isn’t bad after all.
Volkswagen also said that 100% of its retail partners are on board and the company calls this new sales process the “agency model” which is created with the goal of unifying the showroom and online experiences. It remains to be seen how well the agency model will work for dealers, customers, and Volkswagen itself in the long run, but so far, it sounds like a win-win for everyone.
The new model is expected to take effect in European markets come June, with the launch of Volkswagen’s all-electric “ID.3” hatchback.
The practice of selling cars directly online isn’t new and EV companies like Tesla practice this. So with the internet experience consumers already have, this is tipped to grow more bigger later on as more people will come on to follow the trend.