6:02 am, February 27, 2024
JLR has canned plans to move to a fixed price, no-haggle sales model and will be sticking with its current sales model.
Franchise partners were expecting to move to an agency sales model by the end of this year but car dealer bosses have now been told this has been put on ice.
Last June, Jaguar Land Rover told its retail partners that it would be moving to the fixed price model with sales made online on the manufacturer’s website, or in a showroom.
JLR planned to invoice the client instead of the dealer and they were set to be paid a handling fee for handing over the cars. JLR also wanted to take control of the part exchanges offered as part of any deal.
In a briefing with Car Dealer at the time, the firm said the switch was ‘what the customer wanted’ and would allow its dealer partners to ‘focus on customer service’.
However, JLR has now rowed back on those plans following consultation with its retail partners and says it will be sticking with the traditional sales model – albeit with some tweaks.
JLR told retail partners it will still be selling cars online but will be continuing with its traditional franchise model too.
In a statement, the brand said: ‘A relentless pursuit of excellence has delivered opportunity for JLR to design its own unique retail model – a client-centric retail experience that offers the underpinnings of the traditional franchise model, with key adaptations to accommodate the changing demands of JLR’s discerning clientele.’
The move was welcomed by some of the manufacturer’s largest partners including Darren Edwards, CEO of Sytner Group.
He said: ‘The franchise model is a tried and trusted model, which can be intelligently flexed to suit the needs of all stakeholders involved in a new car transaction, i.e., clients, retailers and manufacturers.
‘JLR is to be applauded for adapting to the rapidly changing dynamics we have witnessed in the UK new car market.’
Vertu Motors boss Robert Forrester added: ‘The news that the franchise model will be retained is a decision that was made in consultation with the investor community and provides the stability to progress with delivering innovative services to our clients without distraction. On this basis, we welcome the news.’
Jaguar Land Rover is the latest manufacturer to switch away from plans to introduce controversial agency agreements with its dealers.
Stellantis boss Maria Grazia Davino recently shelved plans for its brands to move to agency, promising a consultation with dealers and external experts before putting anything in place while VW Group’s plans have also been delayed.
Meanwhile, Mercedes has been selling cars under an agency sales models since the start of 2023 while Volvo made the switch in the summer.
Jaguar Land Rover managing director Patrick McGillycuddy added: ‘We are proud of what we have achieved with our partners to deliver the perfect experience for our clients.
‘Taking into consideration the internal and external challenges afoot, and the scale of change required to maintain a sustainable, profitable business, our retail strategy offers a unique and exciting opportunity for JLR and our partners.
‘Our commitment to the Reimagine strategy and bringing that to life in the UK remains unchanged, what we have developed with our partners is significant. Together, we will deliver benchmark experiences for the luxury sector and our clients will be at the heart of that.’
