Proponents of the model argue it reduces complexity and anxiety for buyers, while critics suggest it could drive up prices. Either way, VW says it has no plans to ditch its extensive dealer network anytime soon.
Under the new system – referred to by the brand as an “agency model” due to the use of independent dealers to service stock – each Cupra variant will be allocated a non-negotiable drive-away price, and customers will be able to secure a vehicle over the internet.
Cupra is not the first brand to implement the increasingly popular sales structure in Australia – Tesla and Genesis currently operate with fixed pricing, while Honda and Mercedes-Benz will transition to comparable systems in the coming months.
However, a spokesperson for Volkswagen Australia told CarAdvice: “No [this is not a toe in the water for the group more broadly]. Certainly not the way some other brands have changed the way they deal with their dealer network – that’s not what we’re looking at.”
“With the inclusion of Audi [into Volkswagen Group Australia] now, we’ve got 180-plus dealers and they’ve always been part of the process … The agency model just works for Cupra because there is that willingness and that desire to have agility and flexibility from the get-go, but it’s certainly not something that we’re looking at for Volkswagen or for Skoda – our dealers are a pretty important part in all of this.”
“This just gives us the opportunity to grow [Cupra] quickly. Setting up a massive dealer network of 30-plus dealers takes a lot of time, and by doing it this way we can grow quickly, we can get boots on the ground, and grow presence in the market.”
Proponents of fixed pricing argue it reduces anxiety for customers, simplifies the buying process, and streamlines stock allocation. However, some industry experts claim the model has the potential to stifle competition and will likely lead to higher prices.
As previously reported by CarAdvice, John Krafcik – a former senior executive at Ford, Hyundai, Google and Waymo – said: “In a one-price environment for direct to consumer, the manufacturer sets the (RRP) and there’s no room for negotiation, so it will result in higher transaction prices.”
Cupra will launch in Australia between April and June next year, with the Ateca mid-size SUV, Formentor mid-size crossover SUV, and Leon hot hatch available to local buyers with a broad range of powertrain options. You can read more about the line-up by clicking here.
Cupra to launch in Australia with fixed price online retail model, but parent Volkswagen unlikely to follow