bitkahuna

iTrader: (20)

Volkswagen will only sell its ID electric cars online

A new 'agency' model should make buying an EV more straightforward.Rachel England
May 21, 2020Volkswagen is switching up the way it sells its electric vehicles. The company’s dealerships will no longer be the primary point of sale for the ID family of EVs — instead, they will assume the role of an “agent” that facilitates the sale.

If you’re in the market for a VW EV, you can now place an order directly with Volkswagen and choose your preferred dealer. Instead of giving you the hard sell when you walk into the dealership, the dealer will now be focused on organizing test drives, facilitating the transaction and making sure you get the keys to your new wheels without a hitch. The price of the vehicle, plus the dealership’s commission, is fixed, which will bring some financial relief to dealers, too.
The new system — which is being adopted by all of VW’s retail partners across the globe — will roll out first in Europe next month, with the launch of the ID.3. It represents another way that EVs are ultimately reshaping the automotive industry, and should help to maximize EV sales, too — removing the dealership from the equation should make the purchase process a lot more straightforward, particularly as EV-buyers tend to already know what they want.

https://www.engadget.com/volkswagen-will-only-sell-its-id-electric-cars-online-104048481.html

bitkahuna

iTrader: (20)

Just another way the T company has changed everything.

EZZ

I wonder if the dealers are going to be up in arms about this. It says it launches in Europe first. Maybe VW shares profits with the dealers that facilitate this.

mmarshall

That's essentially what Saturn pioneered some 30 years ago, although, back then, there were no internet sales (yet) as we know them today. It was an astounding success, and the brand failed only because the products it sold were mismanaged, not because of how they were sold.

Still some apples and oranges left in the comparison, though. Tesla, unlike VW, runs through a system of company-owned dealership/franchises and service-facilities. That's not the case with VW, which still uses conventional, privately-owned dealerships. Saturn was an interesting cross between the two....Privately-owned dealerships (Saturn called them "Retailers") that had to run according to rigid company policies for sales, service, and used-vehicles.

bitkahuna

iTrader: (20)

read the article?

pbm317

Looks like follow up says it only pertains to Germany at this point. Very different business structure there.

https://electrek.co/2020/05/20/all-v...electric-cars/

U.S. dealers would absolutely be up in arms, and then it would be another state by state battle to slug through. Tesla has actually made it harder it some states for direct sales, as after some states had to grandfather Tesla in through previous loopholes, those loopholes have gotten even tighter. Never underestimate the lobbying power of some of largest sales tax revenue generators in each state.

EZZ

Sorry. I read but must have missed it Happens before my morning coffee

LexBob2

Yup. Kudos to VW for testing this business model. It will be interesting to see how it does for them.

spwolf

it is basically another take on fixed price sale... i am sure you will be able to walk into dealership and get the vehicle too, but it is fixed priced vehicle.

Toyota did this experiment in New Zealand. Sales wise, it went terribly for them in terms of ultimate sales, but I am not sure how profitable has it been (probably was).

Allen K

iTrader: (4)

Not surprising. Consumers have been conditioned to haggle for cars their entire lives. Going to take a major mindset shift to get them to trust that the dealers aren't screwing them over with any pricing structure changes

bitkahuna

iTrader: (20)

and that's why the order online makes sense because they can avoid the shake down from the dealer and just go there (if at all) to pick up the car.

Allen K

iTrader: (4)

But people feel like they have to haggle to get a good price. Take away the haggling and people start wondering about the value that they get. Heck look at JCPenney. They brought in a new guy that said we're going to do away with the coupons on top of coupons and give you everyday low prices (a la Walmart). That strategy failed miserably because even if people were paying less, they didn't feel like they were getting a good deal because they were conditioned to use those coupons.

LeX2K

People should be given choice. If you want to go to a dealer and haggle then the market should be free to let dealers exist. If an auto maker wants only online sales, good. If they want to do both, great. Give the consumer choice, laws that prohibit direct sales are anti consumer.

bitkahuna

iTrader: (20)

not all people.

the car industry has certainly done it to itself. when people buy iphones, boats, heck even homes, they often wonder less or not at all about those things!

again, 'retail' did it to itself, with "sale" signs PERMANENTLY on most store windows these days... it's absurd and manipulative. as you say, consumers expect it, going in for a shirt that says "marked down from $89.99 to $59.99" and today an extra 25% off"... when the shirt cost $3 to make in a bangladesh sweat shop (my brother-in-law's in fashion, he knows).

you yourself have a couple of teslas, did you haggle much with them?

agree with all that, and even with 'fixed prices' (which through distribution is illegal), dealers will find ways to 'add value' to the deal (aka screwing the consumer). scotchguard, rust proofing, and nitrogen in the tires, anyone?

Allen K

iTrader: (4)

Totally agree dealers (and retailers) have done it to themselves. That level of conditioning (gotta get a deal, dealer is trying to get one over on me, etc) is a hard mental hurdle to get over.

I haven't haggled on my last 4 car purchases With the GS and the Odyssey, I did my research (thanks CL and Odyclub!) and e-mailed the dealers with the OTD price I was comfortable with and a requirement that when I come to sign the papers, I'm out in 1 hour. Tesla gets a bit more leeway because direct sales and pay what we say has always been the case.