THOSE leasing brokers already engaged in SME fleet sales are most likely to benefit from the move to an agency model.
That was the view from Ben Waller, associate director at ICDP, who provided an insightful talk at the BVRLA Leasing Broker Conference on Distribution choices ahead for carmakers, and the implications for broker channels.
While Ben acknowledged that there would be a return to more normal supply simply because supply would return and demand would weaken because of the economy, he added that omnichannel retailing was an essential factor in the move to agency.
71% of consumers want an omnichannel approach - and the agency approach is driven by them. The implication is that instead of a fragmented consumer experience they want a single viewpoint - the same offer in Cardiff as in Newcastle.
Ben said the logic was centralised inventory that:
- Removed over-age stock
- Provided availability and better mix
- A richer mix from build to order resulting in 2.8% net gain in profit.
Whether agency or not, omnichannel needs closer integration of all players. But the rush to agency means not all outcomes are known.
Ben said there were a list of questions hanging in the air:
- Will OEMs focus on known captives?
- Will brokers expand to focus on national sales companies?
- Can smaller leasing companies expand to fill the gap?
In his opinion, Ben said that national sales companies were likely to favour wholesale SME brokers to reach those hard to get SME fleets, while there would also be more overall lifecycle control from OEMS, suggesting there might be more buyback agreements to come into play, possibly by subscription services or flexible leasing agreements.
Following Ben’s presentation a panel discussion took place with Alastair Cassels of MHA Macintyre Hudson suggesting that OEMs still faced an issue because the move to agency meant that it took away a market lever:
So they will need more options as pressure valves at quarter end pressure points, at least in the short term and probably in the long term.
Meanwhile, Leasing.com’s Paul Harrison offered this view:
Digitalisation has been with us for the past decade and OEMs are having to become part of the digital culture. I think apprehension is where we’re at because the truth is the detail is still being worked out. When details are made available I think there will be comfort for the market.
The BVRLA Leasing Broker Conference took place on 06 October at the Royal Institute of British Architects in London.
Broker funder Alphabet was the lead sponsor, along with broker funder Leasys, plus Ebbon Group, MotorLease, QV Systems and Trakm8.
Broker News was the media partner of the event.
Photos: Ralph Morton/Broker News; BVRLA
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
