Skoda forgoes agency model!

Skoda pulls the emergency brakes: Contrary to expectations, the Czechs have put their plans to introduce the agency model on ice. This surprising decision was announced by Thomas Peckruhn, Vice President of the Central Association of the German Motor Trade (ZDK), at a recent event. With this move, Skoda becomes the first brand within the Volkswagen Group to clearly distance itself from the agency model – a step that could unsettle the entire industry, as Automobilwoche reports.

Originally, Skoda planned to introduce the agency model in the fourth quarter of 2024 with the launch of the new E-SUV Elroq. In this sales model, dealers act as intermediaries and sell the vehicles on behalf of the manufacturer. It was also intended to apply to Skoda's new electric vehicles. However, the brand will now stick to the traditional sales system, where dealers operate on their own account – a model that has proven to be more cost-efficient for many. The agency model brings significant additional costs for manufacturers: From warehousing and financing to marketing and logistics, as well as investments in new IT infrastructure and additional personnel, costs rise rapidly.

Major sales discussions within the Volkswagen Group

This decision reflects the uncertainty within the Volkswagen Group, where the sales strategy has long been a subject of controversy. Some officials support an expansion of the agency model, even for vehicles with internal combustion engines. However, Skoda's recent withdrawal signals that the group may be moving away from this strategy. "An expansion of the agency is expensive," warns an industry expert, emphasizing that the financial risk for the manufacturer is significantly higher than with traditional models.

Personnel changes within the group are also influencing the strategic realignment. Hildegard Wortmann, who was considered a proponent of the agency model, has left Audi, while Martin Sander, who had halted the model at Ford, now sits on the Volkswagen brand board. However, an insider does not expect Volkswagen to completely abandon the agency system in the short term. Rather, it remains to be seen how the existing models at VW, Audi, and Seat/Cupra will be continued and evaluated.