CDL franchise panelCDL franchise panel

CDL23 News

MG boss calls agency model a ‘margin grab’ and believes many will fail due to manufacturer arrogance

  • MG, Suzuki and Polestar bosses appear at Car Dealer Live conference
  • MG commercial director Guy Pigounakis doesn’t believe many agency models could work
  • Suzuki UK boss Dale Wyatt says he would need to fire himself and his management team
  • Jonathan Goodman from Polestar UK says it has to be a partnership to work
Advert

Time 11:46 am, March 10, 2023

MG boss Guy Pigounakis said he believes many agency models will fail because of manufacturer arrogance.

The commercial director said at yesterday’s Car Dealer Live conference: ‘I do think it’s a margin grab and I don’t think manufacturers realise the depth of job and commitment dealers have, especially in the aftersales arena.

‘I think as long as manufacturers are arrogant enough to think that way, I think the agency models I’ve seen by and large will fail.’


Suzuki UK boss Dale Wyatt was in agreement and said he’d be out of a job and should be replaced by Daksh Gupta if agency sales is the future.

Wyatt said: ‘As [Suzuki is] an established manufacturer, if I’m serious about agency then I need to fire my management team. Fire me and hire Daksh Gupta – because I’m not a retailer.

‘I’ve got to change all of my processes. I’ve got a huge investment in IT and a cultural change to oversee, with the punishing implications of taking on all of the stock. It’s not for me.’


Agency sales was one of the big topics of the day, with dealers interested to find out what it could look like for them.

Franchised dealers at the conference, held at the British Motor Museum in Gaydon and sponsored by Auto Trader, had commented in an earlier session that there were so many different types of deal that purported to be agency.

Pigounakis credited agency as a reason many dealers had joined MG, and said that it ‘had a number of partners who are genuinely scared by what agency could do to them’.

However, Wyatt and Pigounakis both agreed that the only one they could see working was the model of Polestar UK and fellow panellist Jonathan Goodman.

Polestar CEO Goodman said: ‘Agency is a word that our friends in the media glibly use to label a whole range of agreements. We set up our business as a service provider agreement rather than an agency agreement. 

‘There are two key tenets. One was that our partners make money, and that was fundamental.

‘Secondly, that we as a new brand control the relationship with the customer but it is a partnership, and I think everyone keeps trying to paint this as black or white.’

He added: ‘The advantage it gives me as a manufacturer is that if something goes wrong I hear about it straight away. But we’re a smaller brand and I fully accept that. We will expand though but as we grow the volume. 

‘I think we’ve got the balance absolutely right but I don’t wholesale the dealers with stock. I don’t issue them with a sales target.’

Win two tickets to Car Dealer Live

Car Dealer is conducting a short five-question survey on your thoughts on finance provider Black Horse.

To win two tickets to next week’s Car Dealer Live event simply answer the questions and provide your name and email address. The draw will take place on March 5.

Fill in the survey here.

Wyatt admitted that as a new entrant he would ‘support Goodman’s view’ but as an established franchise he couldn’t see it working.

Pigounakis also agreed with the Polestar view and said its model wasn’t the ‘agency agreement being banded around in general’.

Image left to right: James Batchelor, James Baggott, Dale Wyatt, Jonathan Goodman, Guy Pigounakis

If you’d like to watch the sessions in full, a streaming ticket will give you access to all the sessions recorded on the day at Car Dealer Live. Log on to the website and purchase a replay ticket for immediate access.

Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

More stories...

Advert
Server 108