BMW UK is adjusting its transition to the agency model for new car sales, opting to “refine the rollout plan” and implement “slight adjustments to the timeline,” as reported by Broker News. This decision comes as the company aims to optimize processes based on insights gained from MINI’s agency model implementation in various European markets.  A BMW spokesperson emphasized the company’s commitment to operational excellence, stating, “We are currently refining the rollout plan for BMW with slight adjustments to the timeline. The focus remains on ensuring operational excellence and integrating key learnings from the MINI transition to optimize processes across all sales channels.”

What is the Agency Model and Direct Sales?

The agency model represents a shift from the traditional dealership model, where independent retailers purchase cars from manufacturers and sell them to customers with their own pricing strategies. Instead, under the agency model, the manufacturer sells vehicles directly to customers at a fixed price, with dealerships acting as intermediaries that facilitate the transaction, handle test drives, deliveries, and service while earning a commission.

This approach is designed to improve price transparency, ensuring that customers pay the same price regardless of the dealership they visit. It also gives manufacturers greater control over inventory management and customer relationships. However, it has been met with resistance in some markets, as it alters the revenue model for traditional dealerships, removing their ability to set competitive pricing and negotiate deals with customers.

While BMW has not publicly confirmed a specific date for its shift to the agency model in the UK, it previously believed that  a potential switchover will take place in March 2026, a year after MINI’s planned transition in March 2025. The recent adjustments are understood to be part of a broader European strategy.

BMW’s Phased Rollout and Market-Specific Approach

BMW’s move follows MINI’s phased rollout of the agency model in January 2024 across ten European markets, including Germany, France, and Sweden. The UK, MINI’s largest market, alongside Spain, Portugal, the Netherlands, and Ireland, is set to transition in March 2025. BMW’s core brand is expected to shift to agency in 2026, starting with Germany. However, some markets, such as the United States and Australia, will retain the traditional dealership model due to structural and regulatory differences.

This move aligns with a trend among several manufacturers, including JLR, Stellantis, Lotus, and Volkswagen Group, who have recently reconsidered or delayed their adoption of the agency model. In the agency model, manufacturers sell vehicles directly to customers at fixed prices, with dealers facilitating transactions and receiving a commission. This approach aims to enhance price transparency and streamline the purchasing process.

[Source: Broker News]