Which car brands are adopting agency agreements

  04 April 2024

Many car brands and manufacturers are looking to change from a franchised model to agency agreements. Some have formally confirmed this is happening, others have hinted at change and some have said they’ll be sticking with the current franchised system.

This page provides links to the latest information about which car brands are moving to the agency model or direct sales and which are sticking with the franchise agreements for their retail networks in the UK.

 

Abarth

Abarth is part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Alfa Romeo

Alfa Romeois part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Audi

Part of the Volkswagen Group that is switching to agency agreements for its UK retailers. Audi retailers have informed Auto Retail Network that the non-genuine agency agreement will in effect be just a reduced margin arrangement and will, at least initially, only apply to fully electric models. This will allow Audi retailers to discount, but to an almost non-existent level. The switch to agency for electric Audis is expected later in 2024.

 

BMW

Senior BMW UK sources have indicated to Auto Retail Network the company is going down the agency route. This was confirmed by sales and marketing boss Pieter Nota, who said it will start with Mini in October 2024 and all BMW cars in 2026, however, Auto Retail Agenda sources have said this has now been delayed until some time in 2025.

 

BYD

Chinese new entrant brand BYD has launched in the UK using the franchised retail model.

 

Citroen

Citroen is part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Cupra

Part of the Volkswagen Group that has switched to agency agreements for its UK retailers.

 

DS

DS, along with Alfa Romeo, had originally said would adopt the agency model for its UK retail network by mid-2023 as part of a bid by the manufacturer to cut distribution costs. However, on 24 November, parent company Stellantis said it would delay the introduction of agency agreements until January 2024 for the UK and most of Europe but will trial agency in Austria, The Netherlands and the Benelux countries from mid-2023. The OEM confirmed this 2024 agency start date at its annual investor conference in January 2023.

 

Fiat

Fiat is part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Ford

Ford already operates a fixed margin agreement for sales of its Mach-e electric car that’s separate to its main franchise agreement. Ford has been considering a move to the agency model for the rest of its range for the UK retail network and in other countries, and has now told retailers it plans to move to agency agreements for all models in the future, with this expected to be implemented at the start of 2025. The brand’s online sales trial and shopping centre showroom in Manchester which ran for a year from mid-2018 to mid-2019, is understood to have provided valuable information into how best online sales can work. However, Ford has recently revealed that its agency move in The Netherlands will now not be rolled-out to the rest of Europe. It is unclear what impact this will have on the UK.

 

Genesis

Genesis operates a full direct sales model including ownership and operation of its physical showrooms. However, in March 2023, it announced that it would adopt the agency model as part of “significant” expansion plans to its existing direct sales approach. In partnership with retailers, it said it would open around 15 new sites in the UK.

 

Honda

Honda has adopted an agency model for sales of its electric cars starting with the Eny1 which went on sale at the end of 2023. The rest of the range is expected to follow suit later in 2024.

Hyundai

Hyundai’s UK managing director Ashley Andrew believes the complex nature of a deal including a finance agreement, new car and used car part exchange means the franchised model is the best way to retail vehicles.

Electric Jaguar

Jaguar Land Rover

JLR has U-turned over agency plans and will now stick with what it calls a “refined franchise” model. Jaguar Land Rover had previously said it will move to an agency model for the start of 2025. Auto Retail Agenda understands the retail network was told at a investors meeting held online and that the Jaguar network will shrink to 20 locations as part of the manufacturer’s “House of Brands” plan which sees the Land Rover name dropped with the group retailing under Defender, Discovery, Jaguar and Range Rover badges. In a statement about the change of strategy, the manufacturer said it had the “unwavering support” of the retailer network and the U-turn was due to rapidly changing market dynamics.
Commenting on the move, Vertu CEO Robert Forrester said: “The news that the franchise model will be retained is a decision that was made in consultation with the investor community and provides the stability to progress with delivering innovative services to our clients without distraction. On this basis, we welcome the news.”

 

Jeep

Jeep is part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Kia

Kia’s UK president and CEO Paul Philpott believes the franchise model is the best option for customers, retailers and the manufacturer. The brand hit its 100,000 new car registrations target in 2022.

 

Lotus

Performance brand Lotus relaunched its network under an agency agreement in 2022 and has more recently opened a flagship store in London’s Mayfair. However, sources have said the manufacturer is now considering a switch back to franchised.

Maserati

While Maserati is part of Stellantis, in the UK, it operates separately from its sister brands including Alfa Romeo, DS, Vauxhall, Fiat, Jeep, Citroen and Peugeot. National sales company boss Peter Charters has said the luxury brand does not have any plans to move to an agency model, yet. He did not however rule out moving to agency in future, once he’s seen how the move goes for the rest of Stellantis in the UK.

 

Mazda

Mazda has no plans to apply an agency strategy to its retail network, with Jeremy Thomson, the veteran managing director of the brand’s UK operation, ruling out the controversial business model’s adoption during the next five years.

 

Mercedes-Benz

Mercedes retailers switched to an agency agreement in January 2023 in the UK. The move was announced in December 2021, by Mercedes board member for sales Britta Seeger, after an agreement was reached with Mercedes’ European dealer council. Retailers Auto Retail Network has spoken to report the systems changeover has mostly gone smoothly however many are deeply unhappy about the drop in profitability under agency. Reports from listed retailers have suggested that under the agency agreement, retailers keep control of F&I and that the margin on each sale is 5%. However, other retailers have told Auto Retail Network the commission varies (from around £500) depending on the model.

 

Mini

Mini is expected to be the first of the BMW Mini brands to move to an agency model. This was confirmed by sales and marketing boss Pieter Nota, who said it will start with Mini in October 2024 and all BMW cars in 2026, however, Auto Retail Agenda sources have said this has now been delayed until some time in 2025. Nota left BMW Group in October 2023.

 

MG

MG head of fleet sales Geraint Isaac has told Auto Retail Agenda that MG is not going agency, and that its dealers are partners: “MG has no intention in the short to medium term of changing.”

 

Nissan

Nissan will stick with the franchised model for the time being for its network, according to the brand’s managing director Andrew Humberstone. Humberstone refused to rule out a switch to an agency model in future, but said it was “not on my agenda at the moment”.

 

Ora

New Chinese brand Ora, from Great Wall Motors, is entering the UK using a franchised network. However, the brand will hold stock centrally – similar to the way Honda operates in the UK – until a car is ordered by a customer.

 

Peugeot

Peugeot is part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Polestar

Launched as a brand in 2020 in the UK, Polestar operates a direct sales model called a ‘space operator agreement’.

 

Porsche

Premium brand Porsche is planning to stick with the franchised model for the foreseeable future (Auto Retail Network sources say that’s until 2030 at least) and the manufacturer will not be following sister firm VW’s move to agency.

 

Renault

Renault has committed to sticking with the franchise model for retail for the foreseeable, according to a CEO Luca de Meo speaking to Automotive News. He believes that while there are advantages to agency, the disadvantages around stock costs and the inflexibility of fixed pricing versus demand outweigh the up sides.

 

Seat

Part of the Volkswagen Group that is switching to agency agreements for its UK retailers.

 

Skoda

Part of the Volkswagen Group that is switching to agency agreements for sales of its electric vehicles through UK retailers. Skoda switched to agency for EVs at the start of November 2023.

 

Smart

Mercedes-Benz sister brand Smart signed agency agreements with its network this summer (2023), according to the brand’s UK managing director David Browne.

 

Suzuki

Suzuki’s UK boss Dale Wyatt has been vocal in his support for the franchise model for new car sales.

 

Toyota

Currently favouring the franchised model for the UK and it’s working well. However, Toyota was one of the first globally to test agency agreements in the New Zealand market.

Vauxhall

Vauxhall is part of Stellantis which after several delays, has a plan to switch to agency for all its brands no earlier than late 2026. Stellantis is working with independent third party ICDP to run the negotiations between retailers the national sales company.

 

Volkswagen

Along with Audi, Cupra, Seat and Skoda, Volkswagen is switching to agency agreements for its UK retailers. VW initially brought in agency agreements for its electric ID car range, but is now looking to move all new cars sales to a direct model.

 

Volvo

At the end of 2022, Volvo signed contracts with retailers to switch to an agency agreement for its retail network in May 2023, this start date was then pushed back to June. The brand has also launched direct used car sales.

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