Automotive News Europe — 2023-12-13
Automotive Industry
Stellantis is revising the rollout of its agency distribution model in Europe, moving to a country-by-country approach rather than by brands.
The change in strategy comes after Stellantis experienced unexpected IT troubles in September when it began pilot programs in three markets, Austria, Belgium/Luxembourg and the Netherlands.
Stellantis and other automakers are moving to the agency model from traditional retail sales, seeking to save money in distribution, gain better control over pricing and become closer to their customers, especially as more transactions take place online.
The automaker had sought to apply agency distribution uniformly across Europe. Two steps were planned: first, the premium brand cluster (Alfa Romeo, DS and Lancia) and light commercial vehicles from 2024, followed by the volume brands (Citroen, Fiat, Opel/Vauxhall, Peugeot) from 2027.
But the IT issues necessitated a change in plans, Uwe Hochgeschurtz, chief operating officer of Stellantis’ Enlarged Europe region, told Automotive News Europe. “We are moving to a ‘vertical’ approach, all brands switching to agency at the same time, but market by market,” he said.
The rollout will be complete by 2026 in 10 large markets, Hochgeschurtz said, representing the vast majority of sales in Europe.
He said that Stellantis will take at least three months between countries as it rolls out the system, with the time used to ensure compliance with local rules and regulations.
Different approaches to agency
Automakers have taken different approaches to starting the agency model, which represents a huge shift for dealers who are used to holding inventory, financing marketing materials, and bargaining with customers over pricing and incentives. Under agency, the automakers own the inventory and pay for marketing, while dealers receive a fixed amount for each car sold and can make money on after sales.
Ford and Mercedes-Benz started with agency pilot programs before applying the new model across their European sales networks. BMW Group is starting its move to agency with pilot programs for the Mini brand next year in selected countries, before doing the same for the BMW brand in 2026. Volkswagen Group has started the agency model with its full-electric vehicles.
Stellantis’ issues in its pilot countries were related to integrating its own configuration and ordering system with individual dealer management systems. Dealers can choose which management system they use.
IT tests planned
To avoid those problems in the future, Stellantis plans to conduct tests with selected dealers in each country, which will run in parallel with the configuration and ordering system used for cars sold under the franchise contract model. The tests will be run in collaboration with European and national dealers’ associations.
The tests are expected to take six to 10 weeks, and when the new interface proves to work seamlessly it will be put in place across the wider network of dealers in the country, Hochgeschurtz said.
He declined to identify the next countries where Stellantis will introduce the agency model, starting in 2024.
Following the creation of Stellantis in January 2021, the two parent companies, PSA Group and Fiat Chrysler Automobiles, sold their national sales companies in the Nordic counties and in Central and Eastern Europe to private importers. That has left Stellantis with direct-distribution operations in 10 markets, which it calls the G10 countries.
Hochgeschurtz said that private importers operating in 17 other European countries will switch to the agency model, too, “as we want to offer the same sales experience to all our European consumers,” but he did not give a time frame for that process.