BMW postpones implementation of the agency model

The agency model is highly controversial in the industry. Currently, most cars are sold through dealers, where the latter acts as a salesperson to the consumer. The agency model represents a departure from this principle. In that case, the local dealer is no longer the customer’s contractual partner, but the car manufacturer is.

In the agency model, the dealer only acts as an intermediary service provider (i.e., a sales agent) and receives a share of the vehicle purchase via a fixed fee. Individual price negotiations with the dealer are no longer possible, as the dealer is no longer the contractual partner. That should give the manufacturer closer contact with its customers and ensure standardised prices, while reducing the risk, but often also the margin, for the dealer.

The BMW Group announced the switch to the agency model in October 2023 and initially implemented the model for the Mini brand. Italy, Poland and Sweden were the first to do so on 1 January 2024, followed by other countries, including Germany on 1 October 2024.

The plan was to switch the core BMW brand to the agency model at the beginning of 2026 in several European countries, including Germany. However, according to a report in Automobilwoche, the switch will be delayed. BMW is looking into “minor adjustments to the schedule for the ramp-up of the BMW market launches in the individual markets,” a spokesperson confirmed to the German trade journal. This would ensure “optimum implementation of the processes while maintaining the highest possible quality.” However, BMW has not announced a new start date for the agency model.

At the same time, the company emphasises that it is sticking with the agency model. “The genuine agency model is the future-proof sales model for Europe,” the BMW spokesperson said. That is because there has been great uncertainty in the industry since VW announced in December 2024 that it intended to discontinue the agency sales model launched in April 2020, at the beginning of 2026. However, VW had only introduced the agency model for its electric cars, not for other drive types.

But back to BMW: the reason for the delay is that everything should run perfectly right from the start. Mini is said to have experienced noticeable difficulties during the switchover because processes and IT systems did not function as intended, which hindered sales. Apparently, not all purchase scenarios and eventualities were initially covered in the systems, and the manufacturer has since had to rework them during ongoing operations. However, the BMW Group does not want to take this risk with its core brand, which last year had seven times as many new registrations as Mini. Especially as the prices for a BMW are, on average, significantly higher than for a Mini, and the sales effect would be correspondingly greater.

automobilwoche.de (in German)