- Main picture: Uwe Hochgeschurtz, Stellantis chief operating officer for enlarged Europe
CAR manufacturer Stellantis has delayed the planned introduction of agency agreements for its UK Alfa Romeo, DS and commercial vehicle businesses by six months while it trials the new sales agreements in a few smaller European countries.
Agency agreements for the UK brands had been due to start in mid-2023, however this has now been pushed back to January 2024, according to a Stellantis spokesman.
At a European level, the manufacturer will now launch agency in mid-2023 only in Austria, The Netherlands and the Benelux countries before the rest of Europe and the UK move to the new model in 2024.
Stellantis originally said it would move to an agency model for Alfa Romeo and DS last year and had set up 50 working groups with its retailers to discuss how the new distribution approach would work. At the time Stellantis insisted this was not a negotiation.
According to a Stellantis spokesman the delay was being introduced to allow a Europe-wide logistics network to be progressively scaled up and tested on a smaller scale.
Stellantis’ vision is to promote a sustainable distribution model and all involved stakeholders will benefit from these changes with the customer experience at the core.
Customers will be able to take advantage of a multi-brand and multi-channel approach with a wider range of services. Retailers will have a new and efficient business model aimed at benefiting from Stellantis’ 14-brand portfolio, creating synergies, optimising distribution costs and offering additional sustainable mobility solutions. Our partners play an important role by being the representatives of our brands in the field.
The statement by the manufacturer added that the strategic plan had the “ambition to be number one in customer satisfaction in all markets, in both products and services”.
However, speaking to retail publication Auto Retail Bulletin at the end of 2021, Jean Philippe Imparato, Alfa Romeo CEO, said the switch to an agency model was necessary to cut distribution costs in order to counter the rising cost of production, particularly from electrification.
Dealers will have to change their business model. Do not imagine for one second that the current model will be stable in the coming years. This is because if you take a B-segment car, five years ago it cost £10,000, today that’s £15,000. If you put the connectivity, the safety and the EV in, it will cost £30,000. Do you think that customers will double their wages too? No.
If you are pushed in the back by this movement, you have to control your distribution cost. We were living in a world where it was normal to have 30 or 35% as distribution costs.
You cannot spend 30% of your value on distribution costs anymore, it’s not possible. So we are changing the way we sell cars and we are changing in a way to absorb that cost. I can’t say the cost we’ll take out, but it will be significant.
Considering the total production cost with EV, safety and connectivity costs, Imparato said you could be looking at an extra €10,000 per car. “So you have an idea of what we have to do.”
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Tristan Young is an award winning journalist with more than 25 years’ experience reporting on the automotive industry focussing predominantly on fleet and retail. As a self-confessed petrol-head, Tristan has a weakness for car classifieds. When he’s not writing about the automotive industry, he can usually be found outdoors with a small pack of border collies.
