Skoda is set to adopt a direct-sales agency model in Europe, following in the footsteps of companies like Stellantis and Mercedes-Benz making similar moves.
It is understood that Skoda will first introduce the new sales model in 2024 with the upcoming Elroq SUV before expanding it across its range to include EVs as well as private and fleet customers. The new program will see dealerships sell vehicles on behalf of the manufacturer and dealers can expect to make similar returns to those that they currently do.
While it is not yet known in which countries the new sales model will be first rolled out to, Auto News reports that inventory risk and the cost of refinancing new cars will be transferred to Skoda. Meanwhile, dealers will continue to pay for personnel and buildings.
“The planned remuneration allows partners to achieve a similar return as in previous years, if we disregard the past two years,” Skoda’s German head Jan-Hendrik Huelsmann said. “Skoda partners’ returns have always been better than those of comparable volume competitors.” The VW Group will look to prevent cannibalization across its brands by offering remuneration of around 6.5% under the agency model.
“The launch of the agency model with the introduction of the Elroq and the gradual expansion to new models is in line with our negotiating position,” added the president of the Skoda Dealer Association, Thomas Peckruhn.
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Huelsmann added that Skoda will “reduce personnel and building standards in the sales department in an effort to reduce pressure on our partners.” He added the car manufacturer will soon conduct a network audit and decide on the set-up of its future dealer network in Europe by the end of the year.
Auto News believes that Skoda will emphasize the number of dealers rather than the number of locations.
