The theme of sales model of car manufacturers in recent months has become topical again because the May 31, 2023 the current European Block Exemption Regulation (BER) will expire (BERs are rules to protect competition in particular sectors) for the automotive sector and the next one, 461/2010, will introduce very important innovations, such as the presence of separate contracts for the sale of vehicles, spare parts and assistance.
Stellarafter sending notice of cancellation to its dealers last summer (the existing contracts for its 14 brands will end in June 2023), it formalizes the transition to the agency model. What does this mean for the dealer? Basically the dealership become an agentthe customer signs the contract with the car manufacturer which thus has total control of discounts and stocks. The percentage of the agent, who receives a commission for each car sold, is lower and therefore the percentage of the car manufacturer rises, which in this way recover profit margins.
However, Stellantis should take on various costs, such as the warehouse and distribution costs, which are now the responsibility of the dealers. The transition to this model should then allow for tighter price controls eliminating the contractwhich is one of the most characteristic aspects of the current customer-dealer relationship.
According to Stellantis customers will benefit from a multi-brand and multi-channel approach with a wider range of services. The transition will be led by Austria, Belux (Belgium and Luxembourg) and the Netherlands from July 2023, with the rest of Europe progressively following as the new distribution scheme is adopted. According to what was reported by the automotive group, the comparative economic simulation with the new model has demonstrated profitability for the dealer network that is at least equivalent, if not higher than at present.
