AUDI has decided to move its fleet sales to an agency model, leaving behind the current dealer based system.
The change in strategy will happen in April 2018 and is being introduced by new head of fleet Tom Brennan.
Audi Fleet will now handle volumes rather than the dealers. Instead of being recompensed through the margin in the car, Audi dealers will be paid a handling fee per fleet car delivered.
The move is likely to rationalise leasing rates rather than allowing dealers to negotiate margins with leasing brokers in order to meet any volume targets.
Although Tom Brennan admits there is some slight negotiating flex built into the handling fee.
Brennan said that Audi Fleet LBDMs were enthusiastic to the changes.
“We’re moving to an agency model because it is the preferred model in the UK,” explained Brennan. “It’s well understood. Most premium manufacturers work in that way.”
Tom added that pressures in the market had made the previous dealer system unsustainable; and the agency route would give Audi Fleet control over the routes to market and the spend.
“It’s the biggest change the brand has seen – it’s taken so much time and energy but we need to make sure we get it right.”
Brennan added that in fleet Audi needed to maximise its routes to market whether corporate, SME (leasing companies and LBDMs) and through leasing brokers.
“We need to continue to engage with all parts of the market to drive our ambitions. It’s about maintaining the strength we have today.
“We will engage directly with brokers and through leasing companies – so much is online now we have to. The guys at leasing brokers such as Nationwide Vehicle Contracts and Fleet Alliance have great power. My ambition is to continue to work with that section of the market.”
Brennan said there would be no restructuring of the Audi Fleet team. Instead the focus would be on developing the network and increasing the number of LBDMs from its current head count of 150.
“We will be developing the network and want the LBDMs to work with the offers we put in their hands. We expect our network to engage with local businesses, SMEs and leasing brokers – their behaviour doesn’t change.”
“Dealers will have certainty about how much they get per car. It’s not about how much you can give away on the car any more.”