Agency Model: Innovative Sales Methods Ep 35

The traditional car franchise distribution model for auto dealers has been in place for decades. Car manufacturers, known as original equipment manufacturers or OEMs, distribute vehicles to independent car dealerships that then sell the vehicles to customers. This model has led to a sometimes strained relationship between OEMs and dealers as they negotiate vehicle pricing, sales targets, and other key terms. However, the car distribution model is evolving. Some OEMs are moving to an agency model, where the OEM maintains ownership of vehicle inventory and dealers act more like agents facilitating sales. This shift is impacting both dealers and distributors. For dealers, they may have less control and profit potential but also less financial risk. For OEMs, the agency model provides more control and direct access to customer data. The future of car distribution is unclear but likely to open the market to new competitors. Electric vehicle brands, in particular, are not tied to the traditional franchise model and can implement new distribution strategies. The agency model may give EV brands more flexibility and control as they work to gain market share. Dealers and distributors will need to adapt to any changes to the long-standing franchise model to remain competitive. The car distribution model is poised for disruption. While the franchise model has been successful for decades, the agency model and new competitors will significantly impact both dealers and OEMs. The future is uncertain but likely to enable new opportunities for innovative sales and marketing within the automotive industry.Become a supporter of this podcast: https://www.spreaker.com/podcast/talking-business-with-mark-and-john--5696935/support.