Industry News

Dublin, Ireland – June 6, 2024

Volkswagen Group Ireland (VGI) is implementing a significant change to its sales strategy in Ireland. Starting June 2026, VGI will begin selling vehicles directly to consumers through an online platform. This move represents a substantial shift from the traditional franchised dealership model and will have a notable impact on both dealerships and car buyers.

A New Sales Landscape

• Online Storefront: As of June 2026, Irish consumers will be able to browse and configure Volkswagen Group vehicles (including Audi, Skoda, SEAT, Cupra, and Volkswagen Commercial Vehicles) entirely online. This platform will allow for complete vehicle selection, feature customization, and financing arrangements, eliminating the need to visit physical dealerships for the initial sales process.
  
  
• Omnichannel Experience: While the online platform takes centre stage, dealerships won't disappear entirely. They will transition into handover centres, responsible for vehicle delivery, familiarization sessions, and after-sales services. Test drives will still be available at dealerships, allowing potential buyers to experience vehicles before purchase.
  
  
• Flexibility for Consumers: VGI's new model offers a blended sales experience. Customers who value convenience can complete the entire purchase online, while those who prefer a more traditional approach can still visit dealerships for test drives and consultations.
  

Impact on Dealerships

VGI has outlined its vision for the future role of dealerships:

• Focus on After-Sales: Dealers will shift their focus from managing the sales process to providing after-sales services, such as maintenance, repairs, and warranty support. This could lead to a more streamlined handover experience and potentially improved customer service post-purchase.
  
  
• Increased Efficiency: The online platform will automate a significant portion of the sales process, potentially freeing up dealership staff to focus on higher-value customer interactions and after-sales services. This could lead to operational efficiencies within dealerships.
  
  

However, industry analysts anticipate potential challenges for dealerships:

• Profitability Concerns: The move online could lead to a decline in dealership profits, particularly for those who rely heavily on sales commissions. This could also lead to consolidation within the dealership network.
  
  
• Shifting Skillsets: Dealership staff may require additional training to adapt to their new roles, focusing on after-sales services and customer care rather than traditional salesmanship.
  

What it Means for Irish Consumers

• Convenience: The online platform offers significant convenience for consumers. They can browse and configure vehicles at their own pace, eliminating the need to visit multiple dealerships.
  
  
• Transparency: The online platform has the potential to increase transparency in pricing. Customers may benefit from a clear pricing structure that eliminates the traditional negotiation process associated with car purchases.
  
  
• After-Sales Uncertainty: While VGI emphasizes a smooth handover and after-sales experience, some consumers might be apprehensive about the lack of a dedicated salesperson to address concerns after purchase.
  

The Road Ahead

Volkswagen Ireland's online sales model represents a significant change for the Irish car market. It offers potential benefits for consumers in terms of convenience and transparency. However, the impact on dealerships remains to be seen, with potential challenges regarding profitability and required adaptations. This shift marks a move towards a more digital car buying experience in Ireland, and both consumers and dealerships will need to adjust to this evolving landscape.