Many manufacturers are transitioning from traditional dealership models to agency models in an effort to “swim with the tide” that the automotive sector is currently caught in. This change promises substantial benefits for both Original Equipment Manufacturers (OEMs) and retailers, as well as consumers.

Under the traditional model, OEMs sell vehicles in bulk to dealers, who then manage customer relationships, financial agreements, and sales. In the agency model, this dynamic changes: OEMs become the direct point of contact with customers, handling sales and financial agreements themselves. Retailers, meanwhile, focus on facilitating experiences—such as test drives and vehicle handovers—without the burden of ownership risk.

This new model brings clear advantages. For OEMs, it means building stronger, more direct relationships with consumers, gaining valuable insights into their preferences, and enabling more targeted marketing. The transparency of pricing across the market also enhances trust and alignment with consumer expectations.

Retailers, on the other hand, benefit from reduced financial risk as they no longer need to own large inventories. Freed from the complexity of managing sales, they can focus on delivering exceptional customer experiences, helping consumers match their needs to the right products. This streamlined role allows retailers to specialise and thrive in a competitive landscape.

Ultimately, the agency model fosters greater collaboration between OEMs and retailers while offering consumers a more transparent, tailored purchasing journey. It’s a step towards a more connected and efficient future in automotive retail.