Foreign carmakers turn to direct online sales, bypassing dealerships

A growing number of imported carmakers are shifting to direct online sales, a strategy that helps build customer trust in pricing and reduces operational costs, industry officials said Tuesday.

Tesla has set a successful example under its new sales paradigm by selling exclusively online, avoiding the costs of dealership affiliations. This stands in sharp contrast to the traditional dealership-reliant strategies used by most other foreign automakers, including Mercedes-Benz Korea and BMW Korea.

Tesla, which has no dealership network in Korea, operates only a few showrooms for offline promotional purposes. Nevertheless, its Model Y electric SUV ranked as the nation’s best-selling electric vehicle (EV) during the first nine months of this year, outselling rival models from Hyundai Motor and Kia by a wide margin.

One of the key advantages of direct online sales is that carmakers can improve price transparency. Under the current dealership model, customers often pay different prices for the same vehicle, depending on each dealer’s promotions.

The exterior of Mercedes-Maybach’s showroom in Seoul / Courtesy of Mercedes-Benz

This does little to enhance their brand value or build long-term trust with customers.

Mercedes-Benz Korea, one of the two most beloved luxury carmakers along with BMW Korea, is also moving to introduce direct sales next year.

The decision is expected to have a major impact on the nation’s imported car market, as more automakers are likely to follow suit given Mercedes-Benz’s strong brand presence in Korea.

“The online direct sales come with multiple advantages for both carmakers and customers,” an auto industry official said. “Carmakers can exert a stronger influence in the retail system of their vehicles, and customers can also purchase imported cars at a reasonable and trustworthy price due to the fixed-price online direct sales.”

Polestar, a premium EV manufacturer, also uses direct online sales for Korean customers.

Honda Korea has seen solid sales growth since adopting direct online sales in 2023. The Japanese automaker sold 1,385 vehicles that year, and the figure nearly doubled to 2,507 in 2024, just a year after introducing the new sales system.

“However, the new auto sales paradigm will come as a major survival risk to most dealerships, as their role will be gradually reduced with the rise of online direct sales,” another official from the auto industry said.