Dealers, a change of model: the third way of Stellantis, which aims at “commission agents”

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The success of ecommerce had already led car manufacturers to explore possible alternatives to the sales network, but the decisive push came with the pandemic, when virtual showcases began to replace real ones. Volvo Cars announced at the beginning of the year its intention to sell the electric range only online and in recent days Mercedes-Benz has formalized the agreement with its dealer association to change the contract from dealer to agent. Both linked to the Chinese company Geely (owner of the Swedish company and shareholder of the German one with almost 10% of the capital), the two companies have begun to set up work with this system in Sweden.

Stellantis, the Italian-French group that also controls American and German brands, is developing an intermediate solution. The dealers operate in the name and on their own behalf, the agents in the name and on behalf of third parties, while Stellantis aims at commission agents, that is, companies that work in their own name, but on behalf of third parties. It is a path that, at least for now, would only be taken by some brands: Maserati, Alfa Romeo, Lancia and DS, as well as by the commercial vehicle divisions of all brands.

“We are convinced that, if properly implemented, this distribution model will benefit everyone”, Maria Grazia Davino, Stellantis sales and marketing manager for the Old Continent, told Automotive News Europe recently. The number one of Adefca, the European association of Alfa Romeo, Fiat, Jeep and Lancia dealers, Pietro Carlomagno, had confirmed a “constructive dialogue”. The goal of the network is to safeguard profits before taxes: “The main open question is to ensure that the reduction in the dealer’s commission corresponds to the savings obtained from the reduction in costs they now have”, Carlomagno summed up again to Automotive News Europe. Stellantis intends to almost halve the current 9% average margin reserved for retailers, but estimates that the containment of expenses (spaces, zero kilometers, car storage and so on) linked to the new formula should compensate for the difference.

“Dealers, at least in Italy, want to continue to be dealers and not become agents”, warns Adolfo De Stefani Cosentino, president of Federauto who commissioned a specific survey on this point (270 companies out of 1,200 interviewed). Concerns relate to customer and personal service. “With the revision of the agreements – he says – the car manufacturers want to reduce the costs of the sales network. In other words, the number of offices and employment will be compressed ”. The president does not want to go too far in figures, but states that “to meet the manufacturers’ requests we will have to cut costs by 40% and 72% of these are related to personnel”. “You see – adds De Stefani Cosentino – the rules that are allowing this revolution are issued by the Directorate General of Competition. It means that the consumer is at the center, but it is difficult for me to believe that canceling the negotiations (prices will be set by the houses, ed), reducing the branches and having a single subject as a reference can represent an advantage for customers ” .

“Right now – argues the president of Federauto – it’s easy to make margins: also due to the shortage of semiconductors there are few cars and with strong demand, discounts are reduced. But we need to think about when normality will be back. I imagine that if the Chinese manufacturers were to decide to market four million vehicles, the counter would risk jumping ”. A similar alarm was also launched in recent days by Aniasa, the association that deals with car rental within Confindustria.

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However, several manufacturers seem willing not to abandon the current system, starting with the Japanese Toyota and Nissan and, it seems, also from the German BMW. And Saic itself, the colossus of the Middle Kingdom owner of MG, focuses on the dealer network, as well as other Chinese brands that have relied on the Koelliker group for distribution in Italy. In 2023, the contracts relating to after-sales will also expire, another delicate “game”.

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