Selling new cars of well-known brands without the usual model of official dealers may become a reality in a few years. This was stated by BMW. This may be the beginning of a new trend in the car trade, say the Institute of Car Research.
Peter Nota, Head of Sales and Marketing at BMW Group, announced that BMW and MINI could move to the so-called agency sales model in Europe. " We are now talking to our European dealers about moving to a real agency model ," he told Automotive News Europe.
The timing of the transition is still under discussion, but BMW plans to shut down its authorized dealer system in Europe from 2024 for the MINI brand and from 2026 for the BMW brand. The only exceptions are cars of the premium Rollse Royce segment, for which the usual model of authorized dealers and franchisees will continue to operate.
What is an agency sales model?
This does not mean that car dealers will not exist at all. However, their function will change. Today, customers actually buy cars from an authorized dealer who receives exclusive rights to distribute cars of this brand from the manufacturer. That is, it is not just a supplier, but also an intermediate owner of new vehicles. Sales contracts and other agreements, including warranty service, are concluded with the dealer.
Instead, the "agency" model offers a different approach: the dealer becomes an agent who only helps the customer with the choice of car, organizes a test drive, arranges formalities. And the party to the agreement is directly the manufacturer. The agent receives commissions for each car sold. This approach can increase competition between agents, increase sales to the automaker, as well as allow online car dealerships to develop.
Of course, classic dealers will have the advantage of personal communication, individual approach and physical interaction. However, with each passing day, online sales are becoming more common to buy any goods and services, which means that the share of cars sold online will grow over time. This is also understood by other automakers investing in online car sales tools.
