Its dealerships will now adopt a revised version of the existing wholesale model
FELIX PAGE
JLR has told its dealer partners that they will no longer be transitioned to the agency model later this year, but instead continue with a revamped version of their current wholesale arrangement.
The change to an agency, or direct sales, model would have given JLR full control of the car-buying process – be it online or in the showroom – and dealers, or ‘agents’, would have got a fixed fee for each sale.
Direct sales allow car manufacturers to more closely control retail costs, develop closer relationships with their buyers and ultimately retain more of the revenue generated by selling cars.
By contrast, under the wholesale model – which JLR is sticking with – companies sell cars to dealers, who are free to set their own discounts, which promotes haggling and can have an impact on residual values.
A year ago, JLR confirmed plans to shift all its dealers to the agency model as it ushered in the new ‘House of Brands’ showroom structure – whereby Defender, Jaguar, Range Rover and Discovery would be carved out as individual brands with their own distinctive marketing and retail strategies.
The House of Brands ethos survives despite JLR now moving away from the agency model but the firm believes it can still offer “a client-centric retail experience” by using a “refined” franchise structure that majors on “concierge levels” of customer treatment.
JLR has previously spoken of the “warmer, more relaxed” atmosphere that it wants to promote in its dealerships, doing away with the minimalist, ‘Arch’ design language that has defined its dealerships for the past decade.
Managing director Patrick McGillycuddy has now hailed the effort JLR’s retail partners have gone to in order “to deliver the perfect experience for our clients”.
He said: “Taking into consideration the internal and external challenges afoot, and the scale of change required to maintain a sustainable, profitable business, our retail strategy offers a
