How BMW will revamp its retail network for digital age

Where do you see the biggest problems at the start of the agency model?

When we launch at Mini on Jan. 1, 2024, Mini will be completely ready. Mini is not a guinea pig for anything that we could then do better at BMW two years later. All things considered, we are already very far along in terms of IT development and the new structures. From our point of view, however, it still makes more sense to start with Mini and then convert the BMW brand. That’s why we’re taking our time, so that we can then go into the start-up phase in stages.

Will all countries start at the same time on Jan. 1, 2024?

There will be three waves. Germany’s turn will come in the first half of the year. I cannot say now how things will be at BMW in 2026.

Would the agency also be conceivable for the US in the future?

No, definitely not. That would not be compatible with the general conditions in the US

Your competitor Audi, like other brands in the Volkswagen Group, initially will only sell its electric cars with an agency model. Why are you doing things differently?

I think it is extremely important to only introduce an agency model with the entire vehicle portfolio. Anything else will not work in my view, because you then start competing within your own model range.

What do you mean?

If we introduce an agency model for our electric vehicles only and a customer comes to one of our dealerships because he/she wants to buy an i4, then under such an approach it could happen that he/she leaves the dealership with a 4-series coupes. What I am saying is that we do not want our customers to be pushed in any direction at the dealership just because the dealership has another vehicle in stock. That is why I think such a step is fundamentally wrong. There will be no such separation with us.

Is this a lesson learned from the agency model for your electrified cars that you introduced in 2013 and dropped by 2018?

The model worked well in itself for the i3 and i8. In fact, the reason we folded it back in anyway was because of the competition with the conventional sales system. At BMW, the customer and his or her needs are in the foreground, not what the dealer currently has on offer. The changeover now affects the entire brand. That’s different. And that is why it will work.

Stellantis CEO Carlos Tavares wants to cut distribution costs at his brands by 40 percent by 2030. Do you also see potential savings in the agency model?

For us, the agency model is not a cost-cutting program. Of course, new efficiencies will result from a more data-driven management of our sales. We will be happy to take that on board. But we are taking this step to improve the customer experience and the brand experience. In the future, the customer will get the same offer and the same prices everywhere. That is extremely important for us as a premium brand. We do not want the customer to feel that they are being quoted a different price everywhere.

But offering the same prices everywhere can also be a risk. For example, a car that is selling well in an area such as Tegernsee in southern Germany can cause demand to collapse in other regions of the country if retailers have no scope for discounts. Would you accept a loss of sales here?

No, absolutely not. We have a very clear growth strategy at BMW, and we are also gaining market share worldwide. In 2021, BMW was once again No. 1 in the global premium segment, and we want to remain in that spot. There are still opportunities to respond with prices, even within the agency model. Just perhaps not as locally as currently is the case. Even the pricing today may certainly not be perfect everywhere, but in the new model there will at least be uniform prices.

But then you might lose a customer to Mercedes or Audi because of 500 euros…

I do not see that happening. We always have ways of reacting, for example through our young used cars. There are possibilities that we have now and will continue to have.

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