From January 2024, BMW will roll out the much-debated direct sales ‘agency model’ starting for its MINI customers, followed by the BMW brand itself in 2026. Customers will buy their new car online and have a dealer of their choice deliver it, the latter getting a ‘fair’ share of the profit.

No more bargaining at the dealership. “The BMW customer will get the same offer and prices everywhere,” says BMW’s Chief Sales Officer Pieter Nota in an exclusive interview with the German magazine Automobilwoche. For the first time, Nota gives a more detailed insight into the future sales plans of the German premium carmaker.

Latest buzzword

The ‘agency model’ is the latest buzzword in car sales after Tesla pioneered it by working without dealerships, followed by several EV start-ups. Among the traditional carmakers, Volkswagen and its daughter Audi cleared the path for an exclusive sales model for their electric models only.

In December 2021, Mercedes-Benz struck an agreement with the European Association of Mercedes-Benz Dealers (FEAC) to gradually introduce the agency model in Europe over the coming years, starting in Germany in 2023. But also Honda, Polestar, and Geely are taking it up.

Direct-to-customer experience

The agency sales model builds on a direct-to-customer experience. Instead of pushing the stock of new cars to dealers for them to advertise and sell them, the carmaker retains the car ownership and deals directly with the customer. So, the carmaker, not the dealer, will conclude sales contracts with customers. Dealerships only act as agents, receiving a commission for their services.

BMW is going resolutely in that direction with MINI from January 1st, 2024, completely ready all over Europe to be rolled out in three waves, starting in Germany, Pieter Nota confirms. The BMW dealerships will follow in 2026 in precisely the same way.

The carmaker is aligning its own software and configurators with that in the dealerships so that the customer will have the same experience online and at the shop. The IT development and the change of structures require time, and it’s logic, says Nota, to start with MINI in phases. He can’t tell yet how they’ll handle the switch with BMW in 2026.

For the whole model range

Contrary to Audi, for example, which started implementing the agency model for EVs only, BMW Group is going all the way for all models, including ICE. According to Nota, it’s the only thing that will work. Otherwise, you will have models compete with each other within the model range.

After all, BMW had already worked with an agency model for its first electrified cars like the i3 and i8, and it proved to compete with the traditional distribution model. “At BMW, the focus is on the customer’s needs and not those of the dealer,” says Nota. “The change now affects the whole brand, and this will work.”

No more pushing dealer stocks

Nota points out that today, customers first familiarize themselves with the model of their choice on the internet and then go to the dealer to actually buy it ‘live’. BMW wants its customers to get exactly the car they want and not to be pushed by dealer salespeople to vehicles they have in stock and need to be sold first, as this is a huge dealership cost.

And that agency model will consequently be extended to young second-hand cars with a maximum of 18 months of age. Older cars will be exclusively a business case for the dealerships, as are the after-sales and parts.

Commission for every car sold

In exchange, the dealer will get a commission on every new or used sold car, whatever the channel was. How much that commission for the dealer will be – six or six and a half percent like heard at Mercedes-Benz – Nota refuses to reveal, as negotiations with the agent network have started and are ongoing.

If this commission model is insufficient, BMW will “offset the agent’s losses to some extent,” Nota tells Automobilwoche.

The focus will be entirely on the client’s wishes, and Nota wants no competition between online and distribution. The client can order his car ultimately online and assign the dealer for delivery, who’ll get the commission accordingly. Prices will be fixed and the same everywhere – no more bargaining between dealerships.