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Leasing firms object to VW supply changes

The BVRLA has asked Volkswagen to rethink its new direct supply strategy amid a complaints it could damage leasing companies’ dealer relationships.

VW recently introduced a new direct supply model which requires leasing companies to sign up to a standardised agreement with VW dealers if they want to earn “premium” discount on new vehicles.

The BVRLA has intervened after leasing company members expressed concerns the new agreement could end long-standing relationships they have with preferred dealers in favour of a one-size-fits all approach.

BVRLA said it was also worried about VW’s new discount structure, which offers a greater incentive to leasing companies who commit to buying more than 250 VW vehicles a year.

John Lewis, BVRLA’s chief executive, said: “VW’s new agreement could damage our members’ freedom to establish individual commercial arrangements with their local dealership.

“Our members are wondering why VW has to tinker with something that works well.”

Lewis said the new discount threshold would make it more difficult for smaller leasing companies to compete on lease rates for VW cars and could well have an "adverse impact" on VW’s fleet market share.

He said: “For a healthy leasing industry we need a range of different-sized companies and a level playing field for standard leasing company terms.”

VW has had a direct supply agreement with the leasing industry for a number of years, enabling it to allocate a potion of its production to the sector while eliminating its need for dealers to stock vehicles and manage supply. Under the previous agreement, leasing companies were able to specify which dealer they worked with and had the freedom to negotiate terms.

The BVRLA has already put its case to VW head of fleet Vince Kinner, who has promised to respond to the points raised.

Meanwhile, the BVRLA has also requested a meeting with Robin Woolcock, managing director of VW Group UK, to discuss the direct supply agreement.

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