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Lower basic margin and higher bonus payments feature in new VW dealer contracts

Wolfsburg. After months of acrimonious negotiations, Volkswagen and its dealers in Germany have agreed to contracts under the new block exemption.

"There will be no more renegotiations," VW sales director Detlef Wittig told Automobilwoche.

The Volkswagen and Audi Dealer Association called the result of the negotiations "dissatisfying." The basic margin fell from 13.5 percent to 11 percent. However, under a new bonus system a total 20 percent margin can be reached.

"There never has been as much as a 20 percent maximum margin in the past," Wittig said.

The size of the bonus varies. To qualify for it the dealer must comply with certain standards and meet corporate design regulations such as Volkswagen's showroom concept. Earning a high customer satisfaction rating, which VW surveys on a regular basis, will also bring the dealer extra bonus points.

Also, in an attempt to protect authorized German dealers from being undercut by dealers re-importing the new Golf from cheaper EU markets, VW aims to further harmonize EU prices for the new model.

The difference in the net price in Germany and other countries now ranges from 5 percent to up as much as 7 percent in a few exceptional cases, Wittig said. For the Touran, which was launched last spring, the price difference was between 7 percent and 9 percent, for the Polo between 10 percent and 11 percent and for the old Golf it sometimes was more than 25 percent. Only Phaeton and Touareg have uniform EU net prices.

"It is affordable in this category," Wittig said. "We have reduced the price difference for each of the new models and will make another step in that direction with the Passat successor."

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