The Volkswagen Group is pulling back the curtain on its agency contracts

The Volkswagen Group is pulling back the curtain on its agency contracts

In Europe, the group has chosen to distribute its electric vehicles by adopting a “virtual” agency model. The builder works with the Internet for a new business model and relationship between the two parties.

The Volkswagen Group will send agency contracts for the sale of electric vehicles of those brands.

Clarify the situation and take some of the pressure off: it’s on these terms Xavier Chardon, the chairman of the management board of Volkswagen Group France, spoke about the new agency agreements that have already been set for the distribution of the Cupra brand, and which are also arriving for that of the group’s brand of electric vehicles. For the Volkswagen brand, the start will be identity marketing. Buzz, whose sale is scheduled for the second half of 2022.

Read also: Volkswagen is moving towards agency contracts for the distribution of its electric range

We want to make sure that the customer stays in our ecosystem for the longest time, to move towards a sponsored sales cycle, a second, or even a third. We want, during these cycles, remarketing to be done with the help of the internet. We want to get out of this warm logic where, after four years, we lose 50% of customers after sales. The electric car is perfect for changing paradigms“, said the leader during the presentation of the group’s commercial balance sheet.

Xavier Chardon (Volkswagen Group France) and Vincent Montoux (Suma Group)

Together with Vincent MontouxGroup Director Summa and the president of Audi’s dealer group, Xavier Chardon believes that this new contract will bring more transparency in prices, a negotiation that seems to cause concern for customers. “The customer must comply with the full electrification of new vehicles. Today the group has decided on the agency contract and this change must go as smoothly as possible.“, adds Vincent Montoux.

Confirmation of “false” agency contract.

The study is still being completed between the group and the suppliers and managed internally by Luc Chausson. But the group is moving in the direction of the “false contract” or indirect, that is to say it is not true since the agent retains a certain amount of discretion for the price negotiation with the client.

However, this type of contract is not recognized by the European Commission, which in its guidelines specifies that only a true or direct agency contract is accepted. Cecra, in April 2022, had denounced this type of contract that risked being judged as anti-competitive behavior.

Read also: Bernard Lycke, Cecra: “Have the developers understood the obligations attached to the agency contract?”

The Volkswagen Group guarantees the margin of the car sold, defines the price, carries the stock and manages the sales activities, which also means stopping the taxes associated with these activities.

On the other hand, the agent should only manage the internal marketing activities (but without responsibility) and follow the standards.