Automotive News Europe quotes BMW Group’s sales and marketing head Pieter Nota, who said both Bimmer and Mini are considering the newer business model.
“We are currently talking with our European dealers about a move to a genuine agency model,” Mr Nota confirmed.
The agency model takes responsibilities away from franchise dealers (run as separate private or public companies) and gives a car company more control over inventory and real-world pricing – two hot-button issues right now.
Rather than wholesaling stock to franchise dealers, who then must store and sell them while keeping a cut, the agency model means car brands invoice customers directly from inventory they hold, merely giving the dealer a fee for facilitating the test drive, purchase and pickup.
Car brands say that this gives customers access to a more universal pool of stock, rather than forcing them to shop dealer-to-dealer, and it also entirely removes the haggling process. Dealer advocates say it lines the car brands’ pockets and removes healthy competition.
The agency model would potentially be used only in Europe, for now at least, Nota said in the report.
China is not on table at the moment, he added, and it is not possible in many US states where franchise laws prohibit automakers from selling directly to consumers – something that has hurt Tesla which has a direct-to-customer model with no franchise dealers at all.
Mercedes-Benz and Honda have both adopted agency models in Australia, with both brands since taken to court by disgruntled dealers and the consumer watchdog respectively over issues associated with the switch. In the case of Mercedes-Benz, a majority of its dealers want compensation despite signing up to new agreements.
BMW has already conducted a trial along these lines in South Africa, although its Australian team told CarExpert back in 2020 that it had no plans to deviate from traditional franchise dealers. Read that detailed report here.
We have reached out to BMW Australia for comment on whether it might consider a u-turn, so stay posted.
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