The evolution of the automotive sector isn't limited to mass electrification . Technology and all the advancements it has helped to achieve are revolutionizing our understanding of cars. We're referring to all the new recycled materials emerging to make the industry less polluting. But that's not all; social media has also changed how people interact in every aspect of their lives.
In fact, many customers check social media before buying a car to find the information they need. And if they like what they find, then they delve into the official website of the brand in question to learn more about the vehicle they're interested in. This way, when they arrive at the dealership, they know what they want and are simply looking for a bargain price. That's why brands like Mini have decided to change their sales model … Watch out…
From now on Mini dealers will not sell cars, the brand will… directly…
Brands sell their models through their official dealer network . These dealerships are businesses with no direct relationship to the brand, although they must comply with a series of regulations to remain under its umbrella. Thus, they have to display the brand image imposed on them, purchase cars from the dealership (very rarely on consignment), and implement the sales plan proposed to them each month. Then, after the sale, they share any profits…
This creates (and I speak from experience) price wars between dealerships . The reason is that at the end of the month, and year, they have to reach sales targets set by the brand, and if they don't, there are penalties. Here's an example: Before buying a new car, you visit several dealerships of the same brand in your area, and in the end, you choose the one that offers the best price or a freebie you want. Well, Mini is going to put an end to this…
Taking advantage of the electrification of their range, they will "standardize" car prices across Europe. In other words, their sales network will no longer sell cars as it has done until now , but will instead support sales completed online. Therefore, there will be no price war, as selling cars online will make it impossible. They will, however, work alongside their dealerships , which will now receive a fixed commission per car sold.
Later, in 2026, BMW will make its transition to not “depend” on dealers…
According to the official press release published by the BMW Group , in which they explain this new sales system…
“The agency model offers retailers an attractive and future-proof foundation for their business, as well as greater planning security. They will receive a fixed commission per vehicle sold, carefully calculated and taking into account the full range of factors. The same applies to online sales, where they will be compensated for vehicle deliveries . Furthermore, the new sales model allows them to focus on providing the best customer service and consultation.”
The key to this new sales model will be the following…
" Standard national pricing for identical vehicle models will ensure price transparency for customers. Furthermore, as the transition to the dealership model progresses, the BMW Group will digitize the entire purchasing process , offering customers the option to choose between in-person and online shopping experiences , and seamlessly switch between the two."
Mini will begin selling through dealerships on January 1, 2024, in Italy, Poland, and Sweden . If all goes well, it will later expand to the rest of Europe, and BMW will join in 2026. This will digitally centralize the entire car sales process, creating a database to offer new customer experiences. It remains to be seen whether they will succeed, although Stellantis will do the same with Alfa Romeo, DS, and Lancia to increase its profits.
Source – BMW Group
