How BMW will revamp its retail network for digital age

What do you think is the biggest problem at the start of the agency model?

Mini will be fully ready when it launches on January 1, 2024. The Mini isn’t a guinea pig of what BMW can improve in two years. All things considered, we are already very advanced when it comes to IT development and new structures. But from our point of view it makes more sense to start with Mini and change the BMW brand. So you can enter the launch phase in stages over time.

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

Three waves are coming. Germany’s turn comes in the first half of the year. I can’t say right now what will happen to BMW in 2026.

Could this agency be considered in the US in the future?

No, absolutely not.that would be incompatible with the general situation in the United States

Rival Audi, like other brands in the Volkswagen Group, will initially sell only electric vehicles in agency models. why are you doing it differently?

I think it’s very important to introduce only agency models across the vehicle portfolio. Others, in my view, do not work because they start competing within their own model range.

what do you mean?

If you introduced an electric-only agency model and customers came to your dealership because they wanted to buy an i4, such an approach would likely leave the dealership with the 4 Series. coupe. My point is that no customer wants to be pushed in any direction at the dealership just because the dealership has another vehicle in stock. And I think you are. There is no such separation with us.

Is this a lesson learned from the electric vehicle agency model that was introduced in 2013 and retired by 2018?

The model itself worked well on the i3 and i8. Actually, the reason we put it back was because there was a conflict with the conventional sales system. At BMW, our customers and their needs come first, not what our dealerships currently offer. Switching affects the entire brand. That is wrong. And that’s why it works.

Stellantis CEO Carlos Tavares wants to reduce distribution costs for his brand by 40% by 2030. Are there potential savings in the agency model as well?

For us, the agency model is not a cost saving program. New efficiencies, of course, come from more data-driven sales management. I would be happy to do so. But we are taking this step to improve customer experience and brand experience. In the future, customers will get the same offer and same price everywhere. This is very important to us as a premium brand. We do not want our customers to feel that they are being offered different prices everywhere.

But offering the same price everywhere also comes with risks. For example, a car that sells well in regions such as Tegernsee in southern Germany could see demand collapse elsewhere in the country if retailers don’t have room to discount. Would you accept the loss of sales here?

No, absolutely not. BMW has a very clear growth strategy and is gaining market share around the world. In 2021, BMW again puts him in first place in the global premium segment. Even with the agency model, there is still an opportunity to match the price. It probably won’t be as local as it is now. Even today’s pricing may not be perfect everywhere, but the new models will at least have uniform prices.

But with 500 euros you could lose a Mercedes or Audi customer.

I don’t see it happening. For example, through young used cars, we always have a way of reacting. The potential we have now and the potential we will have in the future.