BMW has reaffirmed its commitment to switch its retail network to an agency agreement. It’s a move BMW hopes will enable direct selling to the end customer and sidestepping broker involvement.
Speaking to Broker News after Jaguar Land Rover announced it was backing off agency, UK Managing Director David George said BMW remained committed to direct sales for retail customers. BMW is expected to move to agency in 2026 with sister brand MINI moving over first, some time in 2025.
While most BMW company car drivers and operators already are supplied via an agency agreement, Matt Collins, General Manager of Corporate Sales, said: “I think the average fleet customer or corporate customer wouldn’t necessarily experience the same change as the average retail customer, but I think there will still be benefits for them because it will be a more harmonised offering.
“The customer journey they go through is obviously different to a retail customer, but there is some overlap. So when we improve the customer journey for a retail customer, the end users – the company car drivers – will also benefit from that.”
Broker block on direct channel
Asked if there was a way brokers could work with BMW, Collins said:
“We are not engaging directly with leasing brokers. We want to make sure our retail network is well supported and profitable, particularly as we’re going through a transition to agency. So we want to make sure that we place vehicles in channels that are going to reinforce their business. So at the moment we’re not engaging directly with any brokers and that’s a strategic decision that actually hasn’t changed.”
Daily rental move
While BMW isn’t dealing directly with brokers, it is engaging with daily rental companies.
“We are coming back into rental, but it’s very controlled and very measured,” said Collins. “As I’ve said to all the rental guys, we’re not going to sell in 2024 anything like we did in 2018, 2019 and pre-covid. It is nothing like that. But there is obviously demand in rental and in short-term lease for our products. So we’ll capitalise on that, but it’s not a wholesale kind of pivot towards rental.”
Managing residuals
Collins is acutely aware of the recent falls in residual values, particularly of EVs. Overall in 2023, BMW sold a 25% mix of fully electric cars. In fleet, this mix was closer to 50%, said Collins, who added: “Actually in the second half of the year it was more like 65, 70% that were be pure EV.
“The fleet market is definitely where most of our EV volume comes from, but it’s not 100%. There is still an appetite from retail customers and also in some of our other channels like mobility. Local business is also very EV focused.”
Despite the strong EV mix, BMW claims it wasn’t impacted as badly as some when used electric car values fell sharply at the end of 2023. However, BMW was not totally immune and has in the “short term” taken “measures to mitigate the impact”, said Collins.
He cited the introduction of the i5 Sport Edition as an example – which has a lower P11d value to the rest of the i5 range.
“It’s not just to mitigate an RV position, but it’s obviously giving people an option to get into an i5 at a significantly lower P11d obviously to improve the eligibility of that car in fleets.”
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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.
