Polestar backs the traditional car dealer network, rejecting agency sales

Newly-appointed Polestar CEO Micheal Lohscheller has said he will speed up his company’s retail expansion by turning its back on the fashionable shopping centre locations in favour of more conventional dealer showrooms – mostly alongside existing Volvo franchises.

Lohscheller admitted the firm’s online ordering process and retail-style shopping-centre stores needed to evolve. “Buying a car is an emotional thing,” he told us. “You need to understand the technology; I personally want to have somebody who explains that to me.

“Traditional OEMs have defined everything to the last detail, and that increases costs and it upsets everybody – and does the customer really care? We’ll go to a pragmatic – we call it a non-genuine agency – model; not a pure agency model.”

It means that Polestar, along with other major OEMs, will ditch the no-negotiation, fixed-price sales model that it has been championing since the Polestar 2 launched in 2020. Instead, it’ll revert to a system whereby individual dealers can offer incentives and discounts depending on targets and margins.

“If you come and you say ‘ah, is there another five per cent [discount]?’, we find a solution for you,” Lohscheller said. “In a pure agency model that would not be possible. I think everybody is giving up on this black and white, right?”

The first of these showrooms is already up and running at Polestar London North near Elstree, Hertfordshire. A similar set-up in Southampton is apparently “very close” to completion. 

Lohscheller doesn’t believe placing his dealers with Volvo retail partners will damage his business or cannibalise sales. “The two brands complement each other very well,” he told us. “Volvo stands for different things to Polestar.”

“You have maybe one or two customers who go from A to B, but they are the minority,” he said. “Volvo dealers can service our cars; I want to find more retail groups who sell Volvo who want to take Polestar – it’s incremental business.

Lohscheller says he wants to take Polestar’s retail presence from nine locations to 17 in the next 18 months. “I don’t want another 50 places, because then you have small volume. Give it to the people who want it,” he said.

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