Skoda, the renowned Czech automobile manufacturer, continues to maintain its commitment towards transitioning to agency sales, with plans underway to implement this model for its electric vehicles within the year. This information was disclosed by the firm’s CEO Klaus Zellmer in an interview with Car Dealer.
Zellmer, who was previously a boss at Porsche, revealed that the company is presently intending to sell only its electric models, such as the Enyaq and Enyaq Coupe, through the agency model. However, he predicts that as demand for petrol and diesel vehicles drops, the company will progressively switch over to agency sales entirely.
Despite the shift towards agency sales, Zellmer assured that Skoda remains devoted to ‘keeping the dealers’. He emphasized the importance of the ‘human interface’ to the business. The agency model is already in practice in countries like Spain and Germany, with Zellerman stating that this approach reduces ‘waste in the system’. It also alleviates dealers of the burden of making hefty investments in terms of stock.
The agency model has traditionally been met with scepticism by dealers, questioning its feasibility for profit-making. However, Zellerman countered this by stating that the system was ‘at least as profitable’ for dealers as compared to the conventional sales model.
On the other hand, MG boss Guy Pigounakis openly disagreed with Zellerman’s statement, describing agency sales as a ‘margin grab’. He made this remark at this year’s Car Dealer Live event in Gaydon, where he predicted the failure of the model due to ‘manufacturer arrogance’. He confirmed that MG would continue to adhere to a traditional retail model.
Earlier in the year, Iain Larkin, a leading expert from Radius Law, had shared with Car Dealer that it is ‘still unclear’ if the agency model can indeed be profitable for retailers. He added that Skoda is set to reveal new versions of its Kodiaq SUV and Superb estate shortly. These models will come with petrol, diesel, and plug-in hybrid engines. Skoda will also introduce new battery-powered models while remaining ‘committed to vRS’, which is Skoda’s performance sub-brand.
Zellerman described the development of vehicles within the wider Volkswagen