BMW is considering following in the footsteps of premium competitors Mercedes-Benz and Audi (cable EV) in its ‘agency’ sales in Europe – although its plans for Australia are unknown.
Automotive News Europe Peter Nota, head of sales and marketing at BMW Group, was quoted as saying that both Beamer and Mini were considering new business models.
“We are currently in talks with our European dealers about moving to a true agency model,” Mr Nota confirmed.
The agency model takes responsibility from franchise dealers (operated as separate private or public companies) and gives a car company control over stock allocation and real-world pricing – two hot-button issues at the moment.
Instead of selling the stock wholesale to franchisee dealers, who then have to save and sell them while making a cut, the agency model means car brands give customers a direct invoice from their inventory, only paying the dealer a fee to facilitate test drive, purchase and pickup. .
Car brands say it gives customers access to a more universal pool of stock instead of forcing customers to shop at dealer-to-dealer and this completely eliminates the hustle and bustle process. Dealer advocates say it lines up the car brand’s pockets and eliminates healthy competition.
The agency model will likely only be used in Europe, at least for now, the NOTA report said.
China is not on the table right now, he added, and it is not possible in many U.S. states where franchise laws prohibit automakers from selling directly to consumers – something that has hit Tesla with a direct-to-customer model that has no franchisee dealers. Not at all
Both Mercedes-Benz and Honda have adopted agency models in Australia, with both brands suing disgruntled dealers and consumer watchdogs for switch-related issues, respectively. In the case of Mercedes-Benz, most of its dealers want compensation despite signing a new contract.
BMW has already conducted a trial with these lines in South Africa, although its Australian team told CarExpert in 2020 that it had no plans to deviate from traditional franchise dealers. Read that detailed report here.
We contacted BMW Australia to comment on whether this could be considered a U-turn, so post.
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