BMW’s shift to the agency model in sales will bring changes to the way customers purchase their cars. Of course, this approach will only apply to certain markets, no changes are expected in the United States. Pieter Nota, BMW Board Member in charge of Marketing and Sales, stated in an interview with a Munich newspaper that in the future, customers will be able to configure and purchase their BMW from their sofa with just a few clicks without having to visit a retailer.
Nota believes that while many customers will still visit their local dealer for test drives and expert advice, those who do not require such assistance can order the vehicle online through direct sales. During the last step of the order process, customers can specify their desired dealer for collection, who will receive the sales commission and share in the profit.
25% of the sales expected to be online
According to current forecasts, approximately 25 percent of BMW orders are expected to be made online without any consultation with a salesperson. It’s unclear whether this percentage is related to the German or global market. Although customers will not be able to negotiate an attractive discount with a local salesperson, BMW will centrally control discount campaigns in the future. This will result in a fixed nationwide price for the same BMW, regardless of location or salesperson.
Nota views this aspect positively, as it eliminates the possibility of a bad negotiation outcome. Furthermore, BMW’s prices will adapt to market reality, which may lead to lower list prices due to competition. However, recent margins suggest that convincing models can still be sold with minimal discounts.
Sales for the MINI brand in Germany will be shifted to the new model beginning January 2024, followed by the BMW core brand in 2026. BMW has been testing online sales since March 2021 with MINI in China. Once again, BMW of North America has reinforced the fact that this direct-to-consumer strategy will NOT apply to the U.S. market.