In an interview with BMW CFO Nicholas Peter & Muenchner Mekur, there are constructive discussions of MINI going direct sales in 2024 and BMW in 2026. "Konstruktiven Gesprächen" to be exact.
The title says that would mean no dealer discounts on new cars. I wonder if that also means no dealer markups or market adjustments. Sounds like manufacturers have learned from the pandemic: that keeping an inventory on hand at a dealer means lower profits ...
The bullshit with market adjustments that dealers pulled for years now just reached an insane point and manufacturers are looking at Tesla’s model of modulating prices according to demand (meaning it’s not the dealers reaping the rewards of shortages as much anymore) and realizing they likely benefit more that way. Dealers are increasingly getting consolidated and stronger as well and a pain point for most as far as the purchasing experience goes. Aside from guaranteed purchasing (keeps the wheels turning as far as output goes), it’s been all kinds of bad for the brands and DS gives them much more control. Though I suspect it might turn out to become a weird hybrid model with the regulatory capture of dealers and potential litigiousness that would come from those existing contracts ending abruptly like that.
As the number of electric cars continues to grow, and the number of ICE cars begins to diminish, dealerships may be forced to close. Here in Tucson the only MINI dealer decided to stop selling cars, so now they are strictly a factory authorized MINI service center. This new angle seems to be working now, but is it sustainable if the number of ICE MINI’s on the road is shrinking. And, the new electric fleet won’t require nearly as much service. So, what happens if you can order a MINI online, but the nearest service/warranty center is several hundred miles away. That may end up dampening the enthusiasm for BEV’s. Sent from my iPhone using Inside EVs
This works well when no one has inventory. But if your competitor has a lot full of options available today, who is going to pay a premium to order a car and wait? I think they are taking advantage of the current situation, as capitalism is happy to do. But the flip side is that competition will return and put pressure the other way. The dealership model is the result of 100 years of the market working itself out. I suspect it is t going anywhere in the long term. I’m open to being very wrong on these points though - time will be the judge. Sent from my iPhone using Inside EVs
I don't think you're wrong, but you left the effect of powerful dealership lobbyists out of your equation. Tesla can't sell cars in Michigan due to laws promoted by those lobbyists.
The dealership model is a holder of a bygone era, like Sears catalogs. You had to go to a dealer to find out any information on car models, now everything is available online.
Yes, true. They had to get big enough first of course. But now that they are big, they can fight to preserve what they have. So it is entirely possible that Tesla, COVID, or some other factor break their yoke and they crumble. I have no issues with my Mini dealer but I’m just about fed up with my Chevy dealer. Sent from my iPhone using Inside EVs
Per https://www.motortrend.com/news/bmw-mini-rolls-royce-2024-direct-sales-dealership-markup/ (bold below for emphasis): According to its third quarter global business update, BMW indicated that it's planning to introduce a direct sales model in multiple global markets starting as soon as 2024. The plans will allow customers to order directly from BMW, Mini, and Rolls Royce, much like Tesla, Rivian, and other new and start-up brands are already offering. There's just one tiny catch: it's not happening in the U.S. At least, not yet. *** Unfortunately, BMW North American buyers will not be able to have a direct sales option. As a BMW spokesperson told MotorTrend in an email: "News reports stemming from the BMW Group Q3 global business update in Munich referred to a planned change in the retail sales model in Europe and other markets outside of the U.S. Please be advised that this change applies only to the European market and other markets outside of the U.S. and have no impact on our business model or operations here in the U.S."
