Promoting Sustainability in the Automotive Industry: Economic Comparison of Dealer Sales Model and Agency Sales Model of Electric Vehicles in Slovakia

Abstract

Electrification is becoming an increasingly important part of many industries. Electrification is a crucial area of interest in developing electric vehicles and charging infrastructure in the automotive industry. Research and innovation in the field of electric vehicles indicate positive trends. The rise in sales of electric vehicles represents a significant shift away from traditional fossil fuel-powered technologies to more sustainable and efficient alternatives. Electrification also brings with it new trends in sales models. The paper aims to identify recommendations for the practical adaptation of the importer of electric vehicles in the Slovak market based on the analysis of the financial and economic impacts of the sale of electric vehicles. This paper approaches two essential research topics. The first research topic focuses on the analysis of vehicle sales, specifically electric vehicles, and based on the analysis of existing sales, the paper will also outline the sales plan of the selected brand in the period 2023–2025. The second research topic focuses on changes in the business model for the sale of electric vehicles. One of the findings is that a specific indirect sales model for the automotive industry, i.e. selling vehicles through dealers, is used. In the long run, the new agency sales model standards should help correct many of the shortcomings of the current sales system. The effects on the profitability of sellers can be defined mainly by smaller financial costs caused by the cancellation of storage spaces, smaller credit indebtedness resulting from not creating warehouse stocks, and a greater focus on sales and additional services aimed at the end customer. Agency selling also allows the seller to get precious data about the customer and feedback directly to the manufacturer, which can serve as a valuable source of information for improving goods and services, which, in the long run, can lead to greater profitability for sellers. However, the Agency sales model is also coming to the fore. In this paper, the given types of business models are compared, their advantages and disadvantages are highlighted, and last but not least, the expected profits of the analysed company are calculated for both types of sales models.   

Keywords: agency sales model, business model, dealer sales model, economic comparison, electric vehicle