Fleet News

VW drops dealer margins in bid for bigger market share

VOLKSWAGEN is to reduce dealer margins by 1% in a bid to improve customer service levels across its franchised network and further increase market share. Announcing the cut - from 10% to 9% - the company explained that the difference would be invested in improving aspects of its retail operation. The 1% will be paid back to dealers six months after a sale but it has to be invested in the dealership.

The move is part of Volkswagen's ongoing campaign to increase its UK market share from the current 5% to 6% of the UK new car market and is designed ultimately to make its dealers more profitable.

National fleet sales manager Vince Kinner said the move would nudge front end pricing a little higher in the short term, but would ultimately pay dividends in terms of enhanced residual values.

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