Agency ‘yet to be fully tested’  

OEMs who have moved to agency are yet to be fully tested on their skills at selling cars compared to traditional retailers. “The lessons learned are limited when supply is restricted,” said the ICDP’s Steve Young during a panel discussion at the Automotive News Europe Congress.

It has been easy for OEMs such as Mercedes-Benz so far due to the parts supply crisis leading to greater demand than supply. But the return of supply will be a crucial test, he said. “Have the manufacturers picked up the skills to understand and stimulate retail demand to give the planned volumes?”

During the event, Toyota COO Matt Harrison indicated it is prepared to look at agency because “existing distribution margins and models are undoubtedly not sustainable… I am reluctant to say we are fans of agency… but auto retail is going to look very different in the future”.

Hyundai Europe chief Michael Cole, however, restated its plans to not embrace agency. Indeed, the OEM is issuing new retailer contracts at the moment, he said – retaining the current retailing system.https://tinyurl.com/sz5jus3r