Audi will switch to direct-sales model for EVs in Germany next year

Audi has reached an agreement with its dealers in Germany to introduce a direct sales system for electric vehicles starting Jan. 1, 2024, Automotive News Europe sister publication Automobilwoche reported.

After this date, dealers will only be allowed to offer EVs on behalf of Audi under the new terms and will no longer buy them from the automaker to sell to end customers. For customers, the so-called agency model means an end to dealer rebates, as sales partners will no longer have any influence on the final price.

The agreement doesn't apply to vehicles with internal combustion engines.

After strong resistance from its dealers, Audi agreed to give its retailers in Germany a fixed commission of 6 percent and a flexible payment of between 1.5 and 2.5 percent. The flexible part is of the payment plan is expected to gradually decrease in 2025 and 2026, with the final number expected to be 1.5 percent, according to dealer sources.

By comparison, VW brand dealers currently receive a 4 percent fixed commission plus a 2 percent flexible remuneration for each EV sold.

At VW Group subsidiaries Skoda and the commercial vehicles division, dealers are still in negotations with the brands on the terms of the switch to the agency model for EVs.

Audi rivals Mercedes-Benz and BMW are also converting to the agency model. In Germany, Mercedes is launching direct sales this month.

Mercedes has agreed to pay its dealers in Germany a fixed rate of 6.5 percent for the first two years and then 6 percent thereafter.

The automaker also uses the new model with the Smart brand, which it jointly owns with Geely.

BMW has said it does not plan to switch its sales model until 2026. It will offer dealers a fix rate of 5.5 percent plus variable bonuses that would take the total compensation to 7.4 percent, according to research from Automobilwoche.

Renault Group, by contrast, has said the risk of holding hundreds of millions of euros in inventory under the new system outweighs any potential gains possible from transitioning away from the current model.

'Good result'

"This is a good result," an Audi dealer told Automobilwoche. The dealer said he expects an average of 7.5 percent in the next few years.

Sales of full-electric Audis reached 28,322 last year in Germany, the KBA federal motor transport authority said.

Audi European sales chief Jens Puttfarcken is currently introducing the agency system for EVs in other European countries including France, Sweden and the U.K.