It affords prospects constant, clear ‘no-haggle’ pricing and a extra simple shopping for course of. For producers, it means elevated buyer knowledge, elevated buyer satisfaction and decreased distribution prices and monetary threat.

“The agency model seemingly has several advantages for manufacturers and consumers alike,” says the Cox Automotive report. “For the former, acquired data will no doubt aid consumer retention. It could also more sharply focus marketing strategies. And, for the consumer, at the outset at least, it means transparent pricing and, allegedly, a more hassle-free buying experience.”

The company mannequin has already been adopted by Mercedes all through Europe. Brands like BMW, MINI, Ford, Skoda, Smart, Genesis, Jaguar Land Rover and Alfa Romeo are additionally investigating the rollout of this mannequin.

But what’s the vendor’s position on this new retail chain, and what advantages may it provide? Depending on the specifics of the company mannequin adopted by the producer and the way it evolves, it may imply doubtlessly decreased monetary threat and improved cashflow. This may unencumber further income for sellers to spend money on used automobiles and aftersales, or investing in buyer touchpoints – particularly digital.

Questions stay over who will bear sure model prices, equivalent to the price of demo automobiles, coaching and gross margins. Equally, the numerous capital value of the company mannequin may discourage producers, and make them assume once more.

“Privately, many dealer groups worry that the pure model won’t work, because many of the aspects of the traditional arrangement, in their view are essential to their everyday working,” says the Cox Automotive report. “It’s feared that such aspects, which could be upended by agency model implementation, may render the new system impractical. Indeed, if manufacturers fail to comprehend the work dealers are already doing on the ground, introducing agency – in many cases – will prove to be painful and costly.”

Many within the trade consider the pure company mannequin will evolve over time to a extra blended strategy of franchised and company, permitting manufactures to capitalise on the experience of their sellers, particularly relating to part-exchange, used automobile administration and features of finance – all of which require an skilled, enthusiastic and adept vendor to execute.