[55Fisher]

     Featured on BIMMERPOST.com

Source - https://www.autonews.com/bmw/ane-eu-...les-mini-0916/

Summary

BMW’s Agency Direct-Sales Model

BMW stays committed

Despite some automakers retreating, BMW Group will roll out the agency direct-sales model for its core BMW brand in Europe in 2027, following the path already taken by its Mini brand.

Jochen Goller (BMW head of customer, brands and sales) reaffirmed this at the IAA auto show, calling it “the right approach.”

Mini’s phased switch shows proof of concept

Mini began the transition in 2023.

Italy, Poland, and Sweden adopted it on Jan 1, 2024, with more countries (including Germany) joining on Oct 1, 2024.

Now 23 Mini markets use agency sales.

Initial challenges—integrating systems and training dealers—have been resolved, with positive feedback and appreciation for harmonized pricing.

Timeline adjustment for BMW brand

BMW originally targeted early 2026 for its core brand.

The timeline is pushed to 2027 to ensure a smooth rollout and “benchmark level of operational excellence,” with exact market-by-market dates to come.

How the agency model works

Dealers act as intermediaries/service agents and earn a fixed fee.

Automakers own the inventory and typically fund marketing and sales campaigns.

Enables direct customer contact, better supply-chain and promotion management, and nationwide uniform pricing, saving an estimated 10%+ in distribution costs.

Market context

Mercedes-Benz has already adopted agency sales in many European countries (and with its Smart brand).

Other major automakers—Stellantis, Volkswagen Group, Ford, Volvo, Renault, Toyota—have paused, reversed, or declined agency sales due to stabilized demand and production.

Experts note agency sales give BMW stronger control of the premium customer experience, aligning with its brand strategy.

[spuntyb]

I guess makes sense in some markets as more and more cars transition to being simple appliances.

[TEGRITY]

This was coming… it’s a big impact when you can’t negotiate by building loyalty with the brand / dealers especially in countries like AUS, where we pay insane prices.

Another reason to keep your keepers.

[jimvdn]

Best news I've heard in years. Believe it or not, where I live, it's hard to buy a BMW unless it's an SUV. You might find a 5-series, but with a 4-cylinder engine. Factory orders are highly discouraged.

[F32Fleet]

Interesting but these are small markets. US would be really interesting because they couldn't pull tricks with dealer "sales" or order to hit their numbers


Edit: Anyone know of BMW re-opened their corporate dealership in Manhattan NYC?

Iirc some 25 yrs ago it was the only corporate dealership in the US.

[chicagofan00]

Will be really interested to see how this would play out here in the US. I’ve finally found a couple of solid CAs within the last few years that make buying a BMW a breeze. However, up until recently I’ve always hated playing the buying game with dealerships (regardless of brand). If this comes to the US and simplifies the purchase process overall, I’d consider it a win.

[Alpine300zhp]

Originally Posted by chicagofan00

Will be really interested to see how this would play out here in the US. I’ve finally found a couple of solid CAs within the last few years that make buying a BMW a breeze. However, up until recently I’ve always hated playing the buying game with dealerships (regardless of brand). If this comes to the US and simplifies the purchase process overall, I’d consider it a win.

I think US franchise laws make direct sales a non-starter in the US. Any hope for changes to those laws are low because the dealer network has and will lobby hard to prevent any changes allowing a direct sales model.

[Alpine300zhp]

Originally Posted by jimvdn

Best news I've heard in years. Believe it or not, where I live, it's hard to buy a BMW unless it's an SUV. You might find a 5-series, but with a 4-cylinder engine. Factory orders are highly discouraged.

I suggest broadening your reach and find an excellent client advisor outside of your area that you can buy from with ease and ship car to your house or make it a mini-vacation by buying at the store and drive it home. Jon Shafer in California would be an excellent place to start.

[RockCrusher]

Originally Posted by Alpine300zhp

I think US franchise laws make direct sales a non-starter in the US. Any hope for changes to those laws are low because the dealer network has and will lobby hard to prevent any changes allowing a direct sales model.

Oh yeah.

Car dealer owners are very active at the local and state levels of government and have obtained over time legal protection to their franchise status.

Assuming automakers can make an end run around that direct sales is seen as a way for auto makers to increase profits from the retail end of the business which will result in higher prices and at the same time reduce discounts and dealer and customer incentives.

Direct sales...The phrase the cure is worse than the disease comes to mind.

[phader]

Originally Posted by Alpine300zhp

I suggest broadening your reach and find an excellent client advisor outside of your area that you can buy from with ease and ship car to your house or make it a mini-vacation by buying at the store and drive it home. Jon Shafer in California would be an excellent place to start.

Second that.

I never buy in my market. Easy transaction and huge savings every time. Flights are dirt cheap and have them pick you up from the airport. Driving it home is the fun part. You really get familiarized with the car and voila break in is done, on easy going freeway miles.

[phader]

Originally Posted by RockCrusher

Oh yeah.

Car dealer owners are very active at the local and state levels of government and have obtained over time legal protection to their franchise status.

Assuming automakers can make an end run around that direct sales is seen as a way for auto makers to increase profits from the retail end of the business which will result in higher prices and at the same time reduce discounts and dealer and customer incentives.

Direct sales...The phrase the cure is worse than the disease comes to mind.

Agreed.

Direct sales = MSRP = manufacturer selling retail price

[JTK44]

Originally Posted by jimvdn

Best news I've heard in years. Believe it or not, where I live, it's hard to buy a BMW unless it's an SUV. You might find a 5-series, but with a 4-cylinder engine. Factory orders are highly discouraged.

Here in the NYC area there usually more than 30 5 series on each dealer's lots, albeit almost all are 530's and not 540's. Dealers here are set up to accept and encourage factory orders. I have ordered a 540i - virtually non in stock. Very easy to do.

[JTK44]

Originally Posted by RockCrusher

Oh yeah.

Car dealer owners are very active at the local and state levels of government and have obtained over time legal protection to their franchise status.

Assuming automakers can make an end run around that direct sales is seen as a way for auto makers to increase profits from the retail end of the business which will result in higher prices and at the same time reduce discounts and dealer and customer incentives.

Direct sales...The phrase the cure is worse than the disease comes to mind.

Franchise laws that prevent direct sales by the manufacturer are found in state laws. Tesla has had a very hard time getting around them.

There is a history to be taken into consideration. Dealers and franchise laws to protect them were established back in the early 20th century. It was a way for the manufacturers to keep inventory low and sales high, passing the burden of stock to the dealers. Over the years dealers have invested hundred of millions of dollars in their dealerships. They will not go down without a huge fight, so do not expect direct sales anytime soon!

I am not saying I am in favor of dealerships, I am not, but there is a reason for them baked in history and I doubt state laws, anytime in the near future will change to permit direct sales by the manufacturer.

[BmwIowa]

Originally Posted by phader

Second that.

I never buy in my market. Easy transaction and huge savings every time. Flights are dirt cheap and have them pick you up from the airport. Driving it home is the fun part. You really get familiarized with the car and voila break in is done, on easy going freeway miles.

And ESPECIALLY if you specify Performance Center Delivery in Greer, SC. Have done it twice personally and also "helped" a friend get his M2. The 1,100 miles to home nearly completes the break-in miles!

At the PDC, you're treated royally; get a 1/2 day driving school experience in a vehicle like yours ("Not your car, not your gas, not your tires"), a great lunch and detailed personal delivery experience. A factory tour may also be included as is a visit to the BMW Zentrum museum.

[Click_ID]

Dealerships get a bad rap, but here’s the reality.

They’re the only reason MSRP is flexible in the U.S. model. Competing dealers create room for negotiation, rebates, and discounts.

When manufacturers sell direct, they cut out dealer margin. But those savings don’t land with the buyer. Look at Tesla: one price, no deals. That’s the future if OEMs go fully DTC.

So in a way, dealerships act like an unofficial union for consumers. Not by choice, but because their existence forces pricing competition. Without them, MSRP becomes a ceiling we’ll never break through, and the manufacturer keeps the delta.

[Dgjo2022X5MC]

Agency Direct seems to be an oxymoron to me. Is there an agent or is it direct?

In other words, is there an intermediary or am I talking to the OEM.

I don’t understand the model.

[Phillies8008]

Originally Posted by Click_ID

Dealerships get a bad rap, but here’s the reality.

They’re the only reason MSRP is flexible in the U.S. model. Competing dealers create room for negotiation, rebates, and discounts.

When manufacturers sell direct, they cut out dealer margin. But those savings don’t land with the buyer. Look at Tesla: one price, no deals. That’s the future if OEMs go fully DTC.

So in a way, dealerships act like an unofficial union for consumers. Not by choice, but because their existence forces pricing competition. Without them, MSRP becomes a ceiling we’ll never break through, and the manufacturer keeps the delta.

Or: dealers are an unnecessary middle-man that add cost and bring very little value to the table. If any, frankly.

MSRP, such as it is, exists only for marketing purposes so that when dealers "reduce" their price to be below it you feel like you're getting some sort of bargain. It has little, if any, relation to reality. It's like when stores raise the price of an item right before they put it on "sale". You feel like you've gotten a bargain, and they get the price they were asking for anyway.

No more "dealer markup," useless add-on items (nitrogen-filled tires, anyone?), sales guys trying to hide shit in the paperwork, trying to hold you hostage in the dealership in an attempt to wear you down, and slimy F&I guys trying to push overpriced warranties, etc.? Can't say I'd miss any of it.

Dealerships have dug their own graves with consumers – the antipathy is well-earned, and I, for one, would not miss them. At least with a direct sales model I'd walk out knowing that I got the best price the manufacturer was offering, instead of wondering exactly how much I got screwed.

All that being said, they aren't going anywhere soon, at least in the US. They pay a lot of money for the anti-competitive protection they get from state legislatures and get their money's worth. Guess who's paying for all that graft?

[OC40]

[QUOTE=Phillies8008;32352129]
sales guys trying to hide shit in the paperwork, trying to hold you hostage in the dealership in an attempt to wear you down, and slimy F&I guys trying to push overpriced warranties, etc.? Can't say I'd miss any of it.

instead of wondering exactly how much I got screwed.

It sucks that those have happened to you. If anything, I have ground down a sales rep or two to a pulp.

[pz619]

I'm so done with dealerships and their stupid games. Full disclosure, I sold cars through college. I fucking hated everything about it, except that it paid pretty well compared to what my peers were making while putting themselves through school.

Few years back I was trying to buy a Chevy Bolt as a cheap commuter car. The experience with virtually every dealership regionally was only slightly less painful than going down a slide made out of cheese grater. Even this week, a coworker is trying to buy a Chevy Sierra and they won't even give you a price over email unless you show up. When you do show up you learn the internet price didn't include "trucoat" or whatever garbage they are trying to upsell you on that can't be removed. It's basically an industry that barely modernized their process in the last 20 years.

God help you when you get to the final boss, aka the finance person. Then you get to find out about warranties for parts you didn't know existed, gap insurance at 5 times the rate of anywhere else, and get to play "find the hidden fees in the contract".

Bring this to the US. I'm done with the dealership model, burn it to the ground, and let's start over.

PS: Clearly this is a trigger for me...

[Click_ID]

Originally Posted by Phillies8008

and chatGTP....
Or: dealers are an unnecessary middle-man that add cost and bring very little value to the table. If any, frankly.

MSRP, such as it is, exists only for marketing purposes so that when dealers "reduce" their price to be below it you feel like you're getting some sort of bargain. It has little, if any, relation to reality. It's like when stores raise the price of an item right before they put it on "sale". You feel like you've gotten a bargain, and they get the price they were asking for anyway.

No more "dealer markup," useless add-on items (nitrogen-filled tires, anyone?), sales guys trying to hide shit in the paperwork, trying to hold you hostage in the dealership in an attempt to wear you down, and slimy F&I guys trying to push overpriced warranties, etc.? Can't say I'd miss any of it.

Dealerships have dug their own graves with consumers – the antipathy is well-earned, and I, for one, would not miss them. At least with a direct sales model I'd walk out knowing that I got the best price the manufacturer was offering, instead of wondering exactly how much I got screwed.

All that being said, they aren't going anywhere soon, at least in the US. They pay a lot of money for the anti-competitive protection they get from state legislatures and get their money's worth. Guess who's paying for all that graft?

Dealerships are not perfect. A lot of them suck, and nobody’s defending useless add-ons or games in the finance office.
But, they do bring value. Having working for a manufacturer they’re the only leverage buyers have against MSRP. (outside simply not buying/boycott) Competing quotes mean you can negotiate. You lose that when you can’t cross shop.

Direct sales doesn’t remove markup. It just shifts it to the manufacturer. Tesla, and rivian proved it, margins are higher because they keep what dealers used to take. Buyers don’t see the savings.

MSRP isn’t fake, Its the manufacturer’s target. The only reason you sometimes pay less is because dealers compete for your business. Remove them and MSRP becomes the ceiling. Manufacturers are not charities. Any savings goes in their pocket.

Dealers fight for survival, true. But the side effect is buyers keep leverage. With direct sales, you don’t. I’d rather deal with a sales manager who wants to move a car this month than a manufacturer who will never change its online price.
I like having the choice of where I do business.

Dealership=the devil you know

[xlover]

Originally Posted by Click_ID

So in a way, dealerships act like an unofficial union for consumers. Not by choice, but because their existence forces pricing competition. Without them, MSRP becomes a ceiling we’ll never break through, and the manufacturer keeps the delta.

you might have an arguement if franchise laws did not fiercely protect dealer territory and even dealer existence.

Show me a market where a legacy dealer has to compete with a corporate store down the street and if I think they both are doing a crappy job selling to the customer I can open my own between the two and try to put them out of business. That is the only real free market competition.

I always find it hilarious when dealers are gouging the customer they point to “free market” but in reality car buying is one of the most regulated government protected markets for the seller.

[afadeev]

Originally Posted by jimvdn

Best news I've heard in years. Believe it or not, where I live, it's hard to buy a BMW unless it's an SUV. You might find a 5-series, but with a 4-cylinder engine. Factory orders are highly discouraged.

Custom orders may be discouraged (not sure why), but as long as they are available, why aren't you using them?
I've never bought a single BMW off-the-lot. Ever. Always custom ordered my cars. Got exactly what I wanted at the price that I wanted 100% of the time.

Originally Posted by pz619

I'm done with the dealership model, burn it to the ground, and let's start over.

Originally Posted by Phillies8008

Or: dealers are an unnecessary middle-man that add cost and bring very little value to the table. If any, frankly.

That might be true IFF you only look at the selling part of the equation.
However, there is a far bigger customer-OEM relationship exposure during the service experience (in-warranty and out). That is where NOT having a dealer mediating your potential disputes with an automotive OEM can become a huge problem for the vehicle owner.

As a Tesla owner, I can tell you from the first-hand experience what dealing directly with an OEM-owned service center looks like - you get randomly absolutely screwed!
Here are some of the examples:
1). Service appointments can only be scheduled online, and only 4+ weeks into the future. Annoying if you can park your Tesla and drive another vehicle, but highly problematic if you don't have spare cars.
2). Many concerns get dismissed as "within spec" or "not covered under warranty". Last time I had an issue with binding right-rear caliper, they declined in-warranty coverage and offered to "lubricate the caliper" for a you-pay service fee of $566. What the @#$%?!?
3). Different answers to "covered under warranty" claims from different service centers. Purely at the whim of local service managers or most recent HQ directions. So if you don't like the answer from service center A, you can book another +4 weeks appointment at center B.
4). Your chance of getting a loaner goes from 99% @BMW to about 5% @Tesla. The rest of the time you may (or may not) be offered Uber credits. In my case, Uber doesn't serve the area between Tesla Service Center and my house, so they are worthless.
5). 4-hour repair service estimate takes 5+ days to actually get done because HQ fired 1/2 the mechanics as part of some idiotic cost-cutting measure, and service centers are now permanently understaffed.
6). Other times things work out great, and Tesla might even send a mobile service "ranger" to get work done in your own driveway!
7). If you don't like anything, your ONLY recourse is the court system. There is no appeal, and usually no human to talk to.

If you want to see what OEM-owned service center experience looks like, feel free to peruse Tesla owner boards:
https://teslamotorsclub.com/tmc/forums/model-3.137/

Other than that, direct sales model is great!


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