10:20 am, July 1, 2026
A former Volkswagen Group UK boss has revealed he questioned the agency sales model from the very beginning, saying manufacturers failed to understand the impact it would have on dealers.
Paul Willis, who served as managing director of Volkswagen Group UK before later joining Middle East car retail giant Al-Futtaim Automotive, said he was present when the car maker first began developing its agency strategy and warned colleagues it would not work for volume car brands.
Speaking on the Car Dealer Podcast, Willis said he believed manufacturers underestimated the role retailers play in driving sales and profitability.
You can listen to the episode in full on the player below or the video above now.
Willis said: ‘I was in the room in Ingolstadt when we started putting the whole agency thing together.
‘You have to remember, what was the purpose of agency? The purpose of agency was because of the increase in development costs in OEMs and because of the erosion of margins due to intermediaries.
‘The question was: how do OEMs improve their margin? The way they thought they could improve their margin was through an agency-type model.’
Willis said one of the biggest flaws was that the impact on retailers had not been properly considered.
‘The problem was that, round the table, I think I was the only person who was downstream,’ he said.
‘When you started talking to the people around the table about the modelling – have you modelled the impact of this on dealers? – the answer was, they tried to say, “Well, we kind of have”, but when you asked detailed questions, it was obvious to me that they had not.’
He also questioned how agency could cope with the industry’s reliance on self-registrations and tactical registrations to achieve sales targets.
‘At that time we were selling, I’ll just give you round numbers, half a million cars a year, of which at least 100,000 were either self-registrations from dealers to hit targets or internal numbers.
‘So actually the number’s not really 500,000, it’s probably below 400,000. And how do you keep that going in an agency environment? And what impact does that have across Europe on capacity?’
Willis said those concerns led him to oppose the strategy from the outset, explaining: ‘I’m afraid to say, from the very beginning, I questioned it.
‘I don’t think it’s a viable way forward at all. I think it erodes the entrepreneurism that dealers have.
‘Manufacturers need to understand the importance of entrepreneurism that dealers contribute across their geographical area.’
His comments come after several major manufacturers, including Volkswagen Group, have rowed back on agency plans after initially pushing ahead with the model.
Asked whether agency was always destined to fail, Willis said he believed it was, although he acknowledged it was difficult to voice opposition inside a large organisation.
‘I’m afraid I do,’ he said. ‘It’s very difficult when you’re in an OEM. It’s difficult to stand up and say, actually, when the whole room’s saying we need to do this and you’re the only one saying that it’s silly.
‘In big companies, you’ve got to make your point step by step, because maybe there were some elements of agency that could work. Maybe on high-end cars or niche segments. But in volume cars, honestly, I just can’t see it.’
He believes the fundamental problem is that too many manufacturer executives have never experienced retailing first-hand.
He said: ‘I think I understand the value of retailers and what they bring.
‘Often you hear in OEMs that the customer service retailers give is terrible and too inconsistent. Well, I’ve got news for you.
‘Since I left OEMs seven years ago, I’ve purchased my own cars. I have different cars from different brands and I have to tell you, the service I get is absolutely fantastic and nothing is too much trouble.
‘My personal experience in Northern Ireland, where I have two different brands, and in Wales, is that I salute the retailers because they look after me. More importantly, when I’m not around, they really look after my wife.
‘You cannot do that from intergalactic headquarters in the middle of Europe.’
Willis added that his seven years working on the retail side of the industry had fundamentally changed his appreciation of dealers.
‘I absolutely, totally respect the role of dealers. In fact, the role of dealers and the impact they can have on performance is beyond most manufacturers’ understanding.’
Listen to the full interview with Willis by subscribing to the Car Dealer Podcast on Spotify, Apple Podcasts, and more now.
