BMW and Mini are moving to an agency distribution model across Europe, moving to a direct sales program led by Mercedes-Benz and Audi.
Speaking recently, Dr. Auto News At the Concours d’Eleganza Villa d’Est on the shores of Lake Como, Italy, BMW Group sales and marketing boss Peter Nota has confirmed that the brand is in talks with European dealerships to change the agency model.
This confirmation comes a couple of months later Car dealer Claims that BMW will end its dealer system in Europe from 2024 for the Mini brand and from 2026 for the BMW brand. Nota said the timing of the move has not yet been confirmed.
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Under the agency model, BMW will hold direct inventory and ship customers. Dealerships will then be given the responsibility of supplying new vehicles and will receive a fixed fee per vehicle sold. While vendors will make less money for vehicles through this model, BMW says they will reduce costs by maintaining a list and reducing promotional costs.
Auto News Note that premium car manufacturers across Europe often offer dealer margins of 12 to 16 percent. The sales commission through the agency model will be roughly halved.
BMW introduced an agency model when the i sub-brand was first introduced. It later abandoned the model but relaunched it in its entirety in 2020 in South Africa. Nota says the agency model will only be used in Europe and not in China or the United States, where many states prohibit carmakers from selling directly to customers.
It’s not just BMW, Mercedes-Benz and Audi that are moving towards such a sales model. Stellantis will sue its Alpha Romeo, DS, Lancia, Citroen, Fiat Professional, Opel / Voxhall and Peugeot brands in mid-2023. The VW Group sells its ID-branded EVs through an agency model.