Monday, July 22, 2024
NewsBMW Could Become the First Legacy Brand to Offer Direct Sales

BMW Could Become the First Legacy Brand to Offer Direct Sales

BMW and Mini could move to a direct sales model in the coming years.

  • The company’s CFO said buyers will be able to order a car without involving a dealer.

  • This is similar to how new EV brands operate, such as Tesla and Rivian.

  • Direct sales might not be possible everywhere in the United States.

The shift to electric vehicles is responsible for many changes in the automotive industry, one of which is the apparition of the direct sales model, which forgoes dealerships entirely.

Introduced by Tesla and picked up by a number of other start-up EV makers such as Rivian and Lucid, this business model allows customers to order vehicles directly from the manufacturer for a fixed price, without having to shop around dealers and negotiate better terms.

Despite having an existing dealer body, a number of legacy automakers are now looking into the direct sales model, such as Ford and now BMW.

This is because direct sales allow the company to have better control over the supply and the cost of its vehicles, as well as ensure the purchase process and the customer experience are similar for everyone.

The German automaker seems serious about it since the company’s chief financial officer (CFO) said customers will be able to buy a new BMW without involving a dealership in the future.

Of course, this isn’t a positive outcome for the company’s dealerships around the world, which is why discussions are underway between the automaker and its dealer body.

If the company has its way, it intends to introduce direct sales for Mini vehicles in 2024 and BMW vehicles in 2026.

There are hurdles to clear before this becomes possible everywhere however since many American states have laws in place to prevent this business model in order to protect dealership jobs.

This is why Tesla is unable to build service facilities in some places and also why Lucid Motors is currently suing the Texas government.

Changes to these laws could happen in the coming years if consumers and legacy automakers show their support for the direct sales model in the states that allow it, which is what BMW hopes.

Source: Muenchner Merkur via Reuters

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