Agency sales models won't just disrupt the process of selling customers cars but also the sale of value added products, says GardX Group.
The Hampshire-based company – which turns 20 years old in 2023 and are leaders in vehicle protection, insurance and technology products – has admitted the effects of switching to agency sales is a big 'unknown' for dealers and suppliers alike.
The companies that have 'robust' relationships with OEMs will rise to the top, however, says GardX.
Speaking exclusively to Car Dealer – in the video which you can watch at the top of this story – bosses said the topic of agency sales was at the forefront of discussions GardX is having with manufacturers and their dealer partners.
'Agency sales is a big unknown,' said GardX's group chief revenue officer, Dylan Haskell.
'Of course, we have relationships with both OEMs and retailers, and you won't be surprised to hear that this is topic number one in all of our meetings, and certainly an important part of what our strategy is.'
Haskell added: 'I am confident that our industry will continue, will evolve and will embrace this change.'
GardX CEO Billy Coutin explained the challenge that lies ahead for the company.
'We've always taught disciplined sales processes within dealerships.
'Now, of course, the first kind of shift in that was when the whole purchasing journey move more online and consumers going into dealerships and being a better educated about, a, the vehicle that they're purchasing, b, how they're going to fund it, and then, c, what products they're going to purchase with that vehicle.
'That's something we navigated a few years ago, and we're still navigating as the agency model looks to be rolled out.'
With some car manufacturers potentially taking control of certain elements of the car-buying process, the possibilities of dealers selling add-on products still isn't clear.
'I guess the question remains: will the OEMs look to control the supply of F&I products? Will the OEMs look to control the distribution of the part-exchanges as they come back into the network? And those are the things that we still don't really know.'
Coutin added: 'I think certain OEMs are going further down the agency route than others, while some will, I think, let the dealers maintain a lot of flexibility around what products they're going to sell and how they're going to sell them.
'I think some OEMs will probably push a bit harder and go down the route of what we'd call a true agency model, where they are literally just supplying the vehicle to that dealer, and they're just doing the handover process; they're not touching the products and not touching the part-exchange.
'So, I think for us it's important that we've got robust OEM relationships and we continue to grow our dealer network.
'But, more importantly, we give our dealers the tools to be able to execute on product sales in this changing world, whether they actually access the consumer at the front-end in the dealership, or whether they access the consumer online, I think our biggest challenge is making sure that we've got the right systems in place to deal with that shift.'
Haskell went on to say: 'I'm confident of our strategy to ensure that we can support retailers – whether that's the agency model, or online or offline, we've got all of the right processes, disciplines, and technologies, and that solution will be supported and support our customers.'
Last year, GardX Group announced a new five-year strategy to advance its customer value proposition worldwide.
Called 'Ignite', the strategy is designed to accelerate growth and make the company the global number one provider of vehicle protection and F&I products, all supported by industry-leading technology to help dealers, OEMs and customers.
Car Dealer spoke to the company about how it has transformed since its creation in 2003, and how it intends to grow in the future. You can watch the full interview at the top of this story.