Volkswagen Group Ireland not going ahead with direct sales model
Bodyshop.ie has just learned that Volkswagen Group Ireland told some of its dealers today that it will no longer be proceeding with the direct selling agency model next year, as announced last year (2024).
This news was told to the dealers that had been retained (not given termination notices last year) and were requested to sign-up to the agency model. It applies to all Volkswagen Group Ireland brands. That includes Audi, Cupra, Seat, Skoda, Volkswagen Commercial Vehicles and Volkswagen passenger cars.
This decision announced to those dealers today, will formally be confirmed in writing overnight. This decision is being implemented in Ireland immediately, fully reversing the previous plan to transition to a direct-to-consumer sales model.
Ireland and also Sweden were being used a test case for what was called the ‘Direct to Customer’ approach or ‘Future Sales Model’. Now, Ireland is no longer proceeding with the agency model. There is no news about Sweden.
The agency model, is where manufacturers sell directly to consumers online, with the dealers acting as hand-over and service/ aftersales points. It is now being operated by some newer wholly-owned brand entrants such as Tesla. It has also been operated by MINI since March of this year. BMW has not announced yet if it is going to go ahead with a planned Europe-wide direct sales model at some date in the short- to medium-term.
While the agency model is being scrapped in the short- to medium-term, Volkswagen Group will probably maintain that it is still its long-term strategic sales model.
With the reversal announced to the dealerships who had agreed to an agency model after getting letter of intent, they are now being told that it will not be happening, and that they should maintain their traditional and existing sales and aftersales roles.
One dealer told Bodyshop.ie that as a result of the reversal, Volkswagen Group will likely seek reduced wholesale margins from what dealers currently operate under.
The question now remains, will any of the Volkswagen Group Ireland dealers that were given termination notices in May of last year, that they would cease to be Volkswagen Sales dealers from the end of September 2026, be offered to retain their exisiting franchise position?
Those receiving termination notices included five Volkswagen Car dealerships (two of which were being retained at other outlets that they operated); eight Skoda sales dealerships; and all Seat dealerships that also hadn’t a Cupra brand franchise (possibly eight or nine dealerships?), one Volkswagen Commercial Vehicle dealership, and none with the Audi franchise.
Since the termination notices, one new additional dealership has been added to the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles network.
On 28th May last year, we reported on Volkswagen Group going to sell cars direct in Ireland by 2026, using an agency model. Here is a reminder of that and a survey showing what other brands were planning at that time:
Volkswagen Group Ireland has been contacted for a statement or comment. We will update this breaking story as further information becomes available.