A SIGNIFICANT majority of car dealers believe the industry-wide push towards the agency sales model has reached its end, according to the latest Startline Used Car Tracker. The survey reveals that 71% of dealers consider the shift to be “effectively over”.
Deeper analysis of the dealer sentiment uncovers key reasons for this perceived halt:
- 33% of respondents stated that the agency model has not proven successful for most dealers;
- 31% indicated that a majority of manufacturers are now abandoning their agency plans;
- 10% of dealers believe the model is detrimental to customers.
Paul Burgess, CEO of Startline Motor Finance, commented on the findings, stating:
“Just a few years ago, there was a widespread move among manufacturers to shift away from franchises towards the agency model… but the momentum has faltered.” He highlighted that while manufacturers initially sought greater control and margin through the agency approach, “the reality has often failed to live up to the hype,” with some manufacturers backtracking or quietly dropping their plans.
Burgess concluded that the motor retail sector has generally been sceptical of the agency model from its inception and now largely believes “the strategy is unlikely to deliver the revolution that was once promised,” suggesting the franchise model is set to remain dominant.
