How the auto industry is revolutionizing its sales model

One of the first true agency models in Europe was introduced by BMW when it launched the BMW i subbrand for electrified cars. Although BMW abandoned this sales model a few years later, it sparked further pilots such as BMW’s current agency model in South Africa.

In 2019, Daimler undertook a massive transformation of its sales operations in Sweden, introducing a genuine agency model for all models and customer groups.

With this new sales model, Daimler has achieved transparency and control over stock levels, order intakes, transaction prices, and more.

In Sweden, the company is currently testing the processes, systems and tools that might become the new standard of Daimler’s European sales operations.

And the success the company has been having — hitting its original retail target by selling 19,700 cars in Sweden in 2019, and outselling German rivals BMW and Audi in 2020, during the COVID-19 pandemic — give Daimler good reason to expand direct sales to other markets.

In fact, last May Daimler announced that Austria and Germany will be its next European markets to move to an agency model, making Daimler’s sales transformation arguably the fastest and most extensive one in Europe.

In Germany, Volkswagen recently combined the launch of its ID3 vehicle with the introduction of the agency model, and VW sister brand Seat announced plans to follow suit with its Cupra Born EV in Spain and other European markets starting this year.

Unlike Daimler, however, the VW Group is focusing its new sales approach on EVs only and is opting for a variation on the agency model. Here, the dealer remains in charge of several important tasks such as those related to used car remarketing and residual value management. VW, in turn, exerts a more flexible form of price management by setting transaction prices and discounts but without limiting dealers to grant additional discounts.