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Luxury car manufacturers are gradually abandoning dealers and selling to customers

BMW and its Mini sub-brand are following what Mercedes and Audi have done, reducing the number of dealers to switch to direct sales.

At the luxury car show Concorso d’Eleganza Villa d’Este, Italy, last weekend, BMW sales and marketing director Pieter Nota confirmed that the German brand was in discussions with dealers in Europe to transform business model, according to Auto News.

A few months ago, page Autohaus (Germany) also said that BMW can stop using the dealer system in Europe from 2024 for the Mini sub-brand and from 2026 for BMW itself.

A BMW dealership in Wales.  Photo: Sytner Cardiff BMW

A BMW dealership in Wales. Image: Sytner Cardiff BMW

With the new model – which can be called the agency model, BMW will manage the inventory itself as well as the documents related to the sale of cars to customers. The dealer’s job may then be to deliver a new vehicle and will receive a fixed cost for each vehicle sold.

While the dealer will make less profit, BMW says instead, the dealer will reduce costs by not having to store goods and other costs for advertising.

Previously, BMW had launched this model when it introduced the i-series electric vehicle sub-brand. But the German firm then abandoned this model and reintroduced it in South Africa in 2020. Nota says the intermediate model will only be used in Europe, not in China or the US. In the United States, many states still prohibit automakers from selling cars directly to customers.

Before BMW, two other German automakers, Mercedes and Audi, have applied direct car sales.

Answer the interview Auto News Last week, Bettina Fetzer, vice president of communications and marketing at Mercedes says it will cut the number of dealers in most of the world market and applied mainly in Germany.

The Stellantis Group will do the same from mid-2023 with the Alfa Romeo, DS, Lancia, Citroen, Fiat Professional, Opel/Vauxhaull and Peugeot brands. The Volkswagen Group also sells electric vehicles under the ID brand through this model.

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