In the ever-changing environment of automotive retail, the idea of adopting a target-free agency model for franchised car dealers has sparked a robust debate among industry professionals. This innovative approach involves handling the entire new car sales process online, with manufacturers compensating retailers through a handling fee. Although there are skeptics, senior executives at various dealer groups who have already embraced mixed commissions argue that the benefits of this approach outweigh the drawbacks.
Quarterly surveys carried out by AM shed light on dealers’ sentiments regarding the current state of the market and their outlook for the future. The High Performance Indicators survey delves into critical aspects such as sales, profitability, manufacturer relations, and consumer demand, providing valuable insights through telephone interviews with dealers.
Some dealer groups have cautiously expressed optimism about the potential transition towards a target-free agency model. They recognize the initial challenges but find the appeal in benefits such as streamlining operations, reducing costs, and accessing a broader customer base through online sales. Additionally, the opportunity to receive handling fees from manufacturers presents a promising avenue for increased revenue.
However, concerns have been raised regarding the impact of a target-free agency model on consumer engagement and the overall dealership experience. Critics fear that the personalized, hands-on approach that consumers value when purchasing a new vehicle may be lost in a digital transaction. There is also apprehension about the implications for the existing dealership workforce, with some fearing significant changes to job roles and responsibilities.
As the industry navigates this paradigm shift, the survey findings provide valuable context for stakeholders in the automotive retail sector. Despite diverse opinions, the insights from dealer perspectives serve as a barometer for gauging the health of the market, offering critical feedback to inform strategic decisions and industry initiatives.
In conclusion, the concept of a target-free agency model for franchised car dealers has sparked a spirited discussion within the industry. Despite divergent viewpoints, it is evident that this model represents a potential evolution in the automotive retail landscape. As dealers grapple with the implications and opportunities presented by this model, the insights from the High Performance Indicators survey offer a nuanced understanding of their perspectives, serving as a compass for the industry’s trajectory.