12:30 pm, March 18, 2024
Car manufacturers ‘don’t have the talent and experience’ to make agency sales work.
That is the verdict of one industry expert who says that OEMs forced the model onto dealers without investing in the technology to make it work.
Appearing on the latest episode of the Car Dealer Podcast, Paul Hilton, head of Sales Link for JATO Dynamics, said he was not surprised to see brands begin to turn away from agency sales.
His comments came just days after Audi announced that it will be delaying the introduction of fixed price, no haggle car sales for all of its EVs.
Audi will be the latest brand to stall the introduction of agency sales after Jaguar Land Rover canned the project completely two weeks ago, and Stellantis said in December it would be delaying the move until ‘at least the end of 2026’.
Speaking to podcast hosts James Baggott and Jon Raey, Hilton said he was not surprised by the u-turns.
He said: ‘There is a lack of talent and experience in the OEMs to sell online.
‘Business transformation takes time and that is the challenge – you don’t have the luxury of time to make that type of transformation when you’re in such a competitive market like they are today.
‘I think that’s why brands like Audi are looking at what other brands have done and measured that success and thought “this isn’t for us”. JLR are the same and it is not surprising.
‘We do have new entrants into the UK that are committed to putting in place a dealer network and are committed to investing in a dealer network to drive their businesses forward and they are coming in with a very attractive product at a very attractive price.
‘I’m not surprised that brands like JLR and Audi are backtracking on that plan and I think others will follow.’
Over recent years, Car Dealer has been inundated with messages from franchised car dealers, who do not like the way agency sales have been approached.
It is a criticism that Hilton shares, saying that the approach was ‘forced’ on dealers under the threat of losing their franchises.
He added: ‘They [the OEMs] have not invested in the other technology and infrastructure which is required to successfully deliver that [agency model].
‘I think the Volvo example is slightly different. It is fixed pricing but very much a relationship between the manufacturer and dealer network in terms of the distribution of that product.
‘Others have gone different in their approach where dealers are just a pick up agent – effectively a handover agent for the car.
‘I think that’s the flavour of agency that leaves a really sour taste in the dealer network.
‘It was a forced really pressured push that “it’s happening and if you don’t come on board with it, you don’t carry the badge anymore” and that never sits well with dealers.
‘These people have built their businesses over decades so be told that change is being pushed on them, nobody likes that do they?’
The Car Dealer Podcast, sponsored by JATO, sees an industry guest join our hosts to discuss the motor trade’s biggest headlines of every week.
Among the other topics up for discussion in the latest episode were Peter Waddell’s future at Big Motoring World, Cazoo’s ambitions for the coming years and Chinese car maker Yangwang’s crazy pirouetting SUV.
You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.
