If you follow automotive news closely, you may have already seen several articles about upcoming distribution changes among certain manufacturers.

Specifically for the customer, this will change little on the surface, except that the dealer, and by extension the sales consultant, will no longer control car prices.

In other words, it’s a bit like the Tesla model with centers in France and Europe. The prices are set by the brand, as are any discounts, and dealers are now there to direct the customer, fill out the order form (even if the customer can do it online) and ensure that the product is delivered.

End of negotiations?

When we say it won’t change anything for the customer “on the surface”, it’s because there will actually be changes, but only noticeable when the price is discussed. Really, traditional negotiations between the customer and the seller will no longer exist, and the buyer will pay at the list price. So, there will no longer be a cheaper Mercedes or BMW at the dealership in the next town because it lowers the margin more than others. from now on prices will be the same everywhere and will be dictated by the manufacturers themselves.

These are called agency contracts, and it usually gives less weight to the historical distributors compared to the brands. After Mercedes, Volvo and Stellantis, it was BMW’s turn to start. This new commercial policy will take effect in Europe by 2026. Sales of this new model will begin with the Mini brand from 1^Er January 2024, initially in Italy, Poland and Sweden. At the moment, France is not yet worried.

Advantages and disadvantages

Simply put, an agency contract does not allow a distributor to have “freedom” (albeit very relative) on pricing to attract customers compared to other distributors. He will receive a commission on each car sold, sufficient to support the operation with better safety in terms of planning.

However, some distributors are not necessarily happy that they are no longer in business, as has been widely reported across the Rhine. This distribution model is not compatible with all markets, especially in the United States, where many states prohibit direct sales to consumers by car manufacturers.

Dealers will always be able to count on after sales service, which in some garages provides 70 to 80% of revenue, but again with the advent of electric cars, operations may become less frequent in the coming years, as these models usually require less maintenance compared to thermal cars.

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