9:01 am, June 2, 2023
JLR will start selling all its cars at fixed prices with no haggling from late 2024, the car maker has confirmed.
The agency sales agreements will see customers pay a fixed price for all new cars – be they ordered online or in a dealership.
JLR will invoice the customer and not the dealership with the latter left to ‘focus on customer service’.
Unveiling more details of the firm’s ‘Reimagine’ strategy, acting UK managing director Patrick McGillycuddy told Car Dealer the firm believes agency sales are better for the customer.
In a briefing with JLR executives, Car Dealer was told the car maker believes fixed prices are ‘what the customer wants’ and that it’s confident it will work.
Controversially, the manufacturer is also set to take on part exchanges – but it refused to give details of how this would work.
The executive team also refused to reveal details of the commercial agreement with dealers, but said it was confident they would still have ‘viable businesses’.
JLR is implementing a ‘House of Brands’ strategy which will see dealerships split into different areas to focus on Range Rover, Defender, Discovery and, in some cases, Jaguar. All brands will be sold under this no haggle pricing policy from late 2024.
Mandi Newitt, JLR’s agency transformation project manager, said customers currently have ‘high expectations’ of dealers but are ‘pessimistic about whether their standards will be met’ and they mistrust them on pricing.
She said: ‘Today, you could go to a retailer, you could get a price for a car and you could go on to the next retailer and be given a completely different price.
‘So there are elements around that, that customers mistrust. Our customers want to be offered the right experience.’
Newitt said customers will still be able to order their JLR cars in a dealership, but will also be able to do that online.
She said the changes are about letting customers do the parts of the buying journey they want to online – and the parts they want to do in person, in a dealership.
She added: ‘This is about elements being looked after remotely. But physical retail remains critical for us.’
Newitt said JLR believes customers want transparency on pricing and this move will take price ‘off the table’.
She said: ‘Customers increasingly want the opportunity to be able to do business on their terms.
‘If you think about other luxury brands, there is no negotiation on price. You know, you go into the store, and know exactly what you’re going to pay, and it gives you price comfort. This will allow customers to buy from us in confidence going forward.
‘But the physical retail experience is still a really big part of the process. They want to have a relationship with the brand that they’ve bought into. They want their loyalty recognised on every occasion. So from a retail experience perspective, it needs to be practical and emotional.’
Car manufacturers have been accused that agency sales are just a ‘margin grab’ as they’ll be able to take a large chunk out of the sale.
McGillycuddy told Car Dealer: ‘So, I think that’s a fair question, but to be clear it is commercially sensitive in terms of how we answer that.
‘Everything we’ve spoken about has been about how we make sure we are client orientated. But it’s also about how we deliver our success both for us and for our partners.
‘It’s absolutely in our interest to make sure our partners make a great return on their investment. So they enjoy representing our four brands and they retain and keep the best people to deliver the best possible experiences.’
