Mercedes-Benz sister brand Smart will have signed agency agreements in place with its network this summer, according to the brand’s UK managing director David Browne.

The move could put Smart’s 19 partners, with 34 showrooms, ahead of Mercedes-Benz, which is not expected to have its new agency agreements in place until 2023.

“We’ve got letters of intent in place, and we’re just working through the details of the contract now with a view to getting that signed by the summer,” said Mr Browne, who was speaking at the launch of the #1 (pronounced ‘hashtag one’) all-electric family SUV.

Mr Browne added that, due to limited production and a desire for strong residual values, it was unlikely there would be a volume-related element to payments under the agency model. He also ruled out geographically different payments to help those retailers in high-cost urban areas.

“Fundamentally, the most important part of the margin would be fixed. What we are working through is [the desire for] a degree of variable elements, just to make sure everybody’s objectives are aligned. And that might be looking at customer satisfaction, for example. One of the discussions is, could that be a volume-related bonus? My understanding is yes, in theory, we could do that. The question is, do we want to do that? We are working through it at the moment.”

* Read the full interview with Smart’s David Browne in the June issue of Auto Retail Bulletin.