Former VW UK MD Paul Willis explains why the agency sales model isn’t viable for volume car brands.

A former Volkswagen Group UK managing director has warned that the agency sales model was flawed from the start, arguing that manufacturers underestimated the dealer’s impact on sales and profitability.

First doubts raised in Ingolstadt

Paul Willis, who led Volkswagen Group UK before moving to Al‑Futtaim Automotive in the Middle East, recalls being in the room in Ingolstadt when the agency concept was first outlined. He told the Car Dealer Podcast that the idea was driven by rising development costs and the perceived erosion of margins caused by intermediaries.

"The purpose of the agency model was to protect OEM margins as development costs climbed," Willis explained. "The question was how to improve those margins, and the answer they chose was an agency‑type structure."

The missing dealer perspective

Willis said he was the only voice at the table with direct retail experience. When the discussion turned to modelling the impact on dealers, the responses were vague.

"They claimed they had some analysis, but when I pressed for detail it was clear no thorough work had been done," he said. This lack of dealer‑centric modelling, he believes, is the biggest flaw in the agency proposal.

Self‑registrations and sales targets

At the time, Volkswagen was selling roughly half a million cars a year in Europe, with about 100,000 of those being self‑registrations or internal numbers used to meet targets. Willis questioned how an agency model could sustain such figures.

"If the real volume is closer to 400,000, how do you keep that flow going when you remove the dealer’s incentive to register cars themselves?" he asked, pointing to the broader capacity implications across the continent.

Why the model may never work for volume brands

Willis consistently argued that the agency structure erodes the entrepreneurship that dealers bring to their local markets. He warned manufacturers to respect the dealer’s role in delivering customer service and maintaining brand reputation.

"Manufacturers often criticize dealer service as inconsistent, but my own experience buying cars across Northern Ireland and Wales shows the opposite – the service is fantastic and the staff go the extra mile," Willis said.

He added that the distance between a centralised European headquarters and the retail floor makes it impossible to replicate the personal touch that dealers provide.

Opposition from within

Willis admits it was difficult to voice dissent within a large OEM. "You’re the lone voice saying the plan is silly, and the room is full of senior executives pushing forward," he recalled.

Nevertheless, he believes the agency model might have limited application for high‑end or niche segments, but not for high‑volume manufacturers.

Industry reaction and next steps

Willis’s comments come as several major manufacturers, including Volkswagen Group, have retreated from agency plans after initially promoting them. He maintains that many executives have never worked in retail and therefore lack appreciation for the dealer’s contribution to performance.

"The impact dealers can have on overall performance is beyond most manufacturers' understanding," he concluded.

Listen to the full interview on the Car Dealer Podcast – available on Spotify, Apple Podcasts and other platforms.

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The post Ex‑Volkswagen Group UK boss says agency model was ‘never viable’ appeared first on Car Dealer Magazine.

Why did Volkswagen’s agency sales model fail? Insights from ex‑UK boss Paul Willis