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BMW explores ‘dealer’ sales model

BMW is considering tracking Mercedes-Benz premium competitor and Audi (Electric vehicles only) goes down the road of ‘dealership’ sales in Europe – although its plans in Australia are still unknown.

European Automotive News quoted Pieter Nota, head of sales and marketing for BMW Group, who said both the Bimmer and Mini are looking at a newer business model.

“We are currently talking with European dealers about switching to the genuine dealer model,” confirmed Mr. Nota.

The dealership model removes responsibility from franchised dealers (which operate as separate public or private companies) and allows an auto company more control over inventory and pricing in real world – two emerging issues today.

Instead of wholesale stock to franchised dealers, who then have to store and sell them while making a cut, the dealership model means car brands bill customers directly from the store. inventory they hold, merely giving the dealer a fee to facilitate test drives, purchases, and pickups.

Car brands say this gives customers access to a more universal stock, instead of forcing them to shop from dealer to dealer, and it also eliminates the haggling process altogether. Dealer advocates say this limits car brands’ pockets and eliminates healthy competition.

Nota said in the current report, the dealer model is likely to be used only in Europe.

He added that China is not yet on the market and unlikely in many US states where franchising laws prohibit automakers from selling directly to consumers – something that has hurt Tesla, The company has a direct-to-customer model without a franchise agent. at all.

Mercedes-Benz and Honda have both adopted the dealership model in Australia, with both brands since being hit by disgruntled dealers and consumer watchdogs respectively in court over issues related to switch. In the case of Mercedes-Benz, the majority of its dealers want compensation despite signing new agreements.

BMW conducted a test along these routes in South Africa, despite their Australian team saying CarExpert back in 2020 that it has no plans to deviate from traditional franchisees. Read that detailed report this.

We’ve reached out to BMW Australia for comment on whether it could count as a turn, so please keep posting.

THAN: BMW Australia doubled the number of dealers when competitors switched to selling agents
THAN: Mercedes-Benz convinces European dealers to apply the dealership model
THAN: Honda Australia provides detailed information on dealer sales, when the new model goes into effect
THAN: ACCC brought Honda Australia to court
THAN: Questions and answers about the reason why Mercedes-Benz changed the dealer model
THAN: Mercedes-Benz vs. Dealer: Dealer vs. Federal Court Battle Guaranteed on
THAN: NSW senator says Mercedes-Benz lied to Senate about agency switch

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