Retailers need to sell 23% more cars under an agency model to see equal profitability with the franchised system, according to John O’Hanlon, founder of Waylands.

O’Hanlon, speaking at last week’s Vehicle Remarketing Association conference about future challenges facing the industry, said: “We need to sell over 23% extra cars just to stand still under the agency model.”

Waylands operates MG and Kia under the franchised system, and Volvo and Polestar under agency agreements.

His comments were linked to the challenges facing retailers around electrification, which he said could seriously impact aftersales profitability.

O’Hanlon’s solution, alongside selling more cars, was to improve customer retention through the use of better digital assets, new staff roles, training and remembering that “omnichannel is just retail” now – even though only 2.5% of his sales were completed fully online.