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The agency model in the automotive industry: a new direction in customer relations and data ownership?

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The agency model in the automotive industry: a new direction in customer relations and data ownership?
Gepubliceerd op February 7, 2024

The recent shift to the agency model in the automotive industry, led by Stellantis and Ford, brings an interesting discussion about the future of car sales, customer relationships and especially customer data ownership. As manufacturers strive for a unified brand experience and direct customer relationships, traditional car dealers are faced with changing roles and new challenges.

Why automakers are shifting to the agency model

The agency model gives manufacturers direct control over sales and allows them to collect valuable customer data. This data is crucial for personalizing marketing strategies, building long-term relationships with customers, and accurately identifying customer needs and preferences. The shift to an agency model is also a cost-saving measure. Furthermore, this model allows manufacturers to respond more quickly to market changes and customer feedback, allowing them to continuously improve their products and services. The question arises: who is the real owner of this data? Is it the manufacturer, the dealer, or the customer himself? How this question is answered could have far-reaching consequences for the entire industry. We too cannot look into a crystal ball, but we understand that having data nowadays mainly means power.

What will be the impact of the agency model for car dealers?

For car dealers, the agency model brings both challenges and opportunities. Their role shifts to that of service providers, with more emphasis on maintenance and customer service. This requires a new approach to customer interaction and retention. Dealers must now ask themselves how they can continue to add value in an ecosystem where they are no longer the primary sales agent. In addition, they will have to adapt to a changing revenue model, where direct profits from vehicle sales may decrease and revenues become increasingly dependent on services, accessories and customer retention. This shift may prompt dealers to rethink their business strategies and look for new ways to gain competitive advantage in an evolving marketplace.

The urgency to automate the sales process

An essential element in this adjustment is the digitalization and automation of the sales process. By automating administrative processes, you as a car dealer can concentrate on strengthening customer relationships and providing high-quality service. But this also raises questions about data ownership and management. How can you ensure that you remain relevant by collecting and using customer data within the agency model?

And here’s the interesting part: regardless of the direction the automotive industry takes, it is essential that car dealers effectively manage and centralize their sales and customer data. In the current situation, but also with the agency model, you will still have to know the customer to serve him/her well and be successful.

Fortunately, that principle never changes… 

NB: Car manufacturers have taken the path towards an agency model. But what obstacles do you see as a car dealer or does it mainly provide benefits? Because this is a change that still leaves many questions open, we greatly appreciate responses.

Available Bel met Henry