The agency model is shifting approaches in the UK automotive sector, driving significant change in how businesses work, not just in sales, but also servicing and customer support.
Some of the discussion is expected – any change throws up debate – but moving away from traditional dealership-led models that have been in place for decades signals a sea change in approach. So, why are some manufacturers deciding to shake things up?
Agency sales give manufacturers direct control over the customer relationship, pricing, stock, and brand experience. Electric vehicles have helped accelerate this trend, but the shift is part of a broader evolution influenced by digital transformation, consumer expectations, and the emergence of new market entrants – particularly Chinese brands – that are redefining how vehicles are marketed and sold in the UK.
"In basic terms an agency sales model means the vehicle is sold directly by the OEM to the customer and dealers become agents, supporting the manufacturers to facilitate delivery, handovers, test drives, and support. Importantly inventory is held centrally by the OEM, who also controls pricing"
What are agency sales?
The shift away from traditional dealerships gives vehicle manufacturers the opportunity to take over key aspects of the sales process.
In basic terms an agency sales model means the vehicle is sold directly by the OEM to the customer and dealers become agents, supporting the manufacturers to facilitate delivery, handovers, test drives, and support. Importantly inventory is held centrally by the OEM, who also controls pricing.
An agency approach is a good thing for the OEMs as it means consistent brand experience across all sales channels, fixed pricing and simplified purchasing, omnichannel integration, with customers able to browse, order, or engage online or in person, and significantly, full ownership of customer data and insight.
But there are different levels to the agency approach; from the soft model where OEMs control new car sales, but not the used sales and servicing, to the hard model where OEMs control the full customer lifecycle.
Levels of implementation
|
Model |
|
|---|---|
|
Soft |
OEM controls new car sales only; dealers handle used sales and service as before. |
|
Medium |
OEM extends influence to used stock and resale, often through a shared platform. |
|
Hard |
OEM controls full customer lifecycle and multiple vehicle ownership cycles over 5–10 years. |
"In an increasingly digitised world, customer-buying habits have changed – and an agency model provides a consistent and transparent purchase journey – whether that’s online, in a physical showroom, or a combination of the two.”
Mercedes-Benz was one of the first companies to adopt the new sales approach, implementing the full agency model at the beginning of 2023. At the time, Gary Savage CEO of Mercedes-Benz UK said “The launch of our agency model is a hugely exciting time for us and our network – providing our customers with a range of benefits.
Gary Savage: CEO of Mercedes-Benz UK
Gary Savage: CEO of Mercedes-Benz UK
"In an increasingly digitised world, customer-buying habits have changed – and an agency model provides a consistent and transparent purchase journey – whether that’s online, in a physical showroom, or a combination of the two.”
Not every manufacturer is as far down the road with the agency approach, and one of the biggest OEMs, Volkswagen Group, is piloting the sales method with Audi and Cupra, testing the water before it decides if it’s the right move for the entire business. There are headwinds that could slow the firm’s shift to agency, but long-term that’s where VW wants to go.
Marco Schubert, Member of the Group’s Extended Executive Committee for Sales said:
“The full agency with direct sales to customers clearly remains our guiding star in the long-term. However, given changing framework conditions we have to re-evaluate if our current agency model for all-electric vehicles delivers the best possible customer experience. Therefore, we will initiate a joint review process with our wholesale and retail organisations whether returning to an indirect sales model might be a favourable alternative in the short- to mid-term for selected markets.”
OEM Adoption Status (as of July 2025)
|
OEM |
Status |
Notes |
|---|---|---|
|
Mercedes-Benz |
✅ Live |
Full agency model operational since Jan 2023. |
|
Volvo |
✅ Live |
Applied across electric and non-electric sales. |
|
Polestar |
✅ Direct model |
Always sold via online-first agency. |
|
BMW/MINI |
🔄 Confirmed |
Agency model launching from 2026. |
|
Stellantis |
🔄 Postponed |
Revised rollout planned after 2025. |
|
VW Group |
🔄 Piloting |
Audi and Cupra transitioning; others to follow. |
|
Ford |
❌ No formal plan |
Monitoring sector changes. |
|
Toyota |
❌ Traditional model |
No agency implementation currently announced. |
"BYD operates a hybrid agency model in the UK via retail partners and central stock, Ora uses a centralised pricing and fulfilment model – effectively agency in practice."
China incoming
New Chinese brands are rapidly expanding in the UK, including BYD, Ora, MG, and Nio, and many are adopting agency-like or direct-to-consumer models from the outset.
BYD operates a hybrid agency model in the UK via retail partners and central stock, Ora uses a centralised pricing and fulfilment model – effectively agency in practice. MG currently uses traditional dealer channels but is investing in direct to consumer platforms, while Nio operates an agency model across Europe, with UK entry expected soon.
These brands bring digital-first, customer-centric operations, global e-commerce experience and pile further pressure on legacy brands to innovate, simplify and digitise their sales processes.
Polestar, a brand that used to be the performance badge for Volvo, and is now an all-electric marque owned by Chinese giant Geely, shows how sales approaches are developing. The firm mixes online portals and Polestar Spaces dotted around the country, augmenting the traditional model with a digitised approach.
The UK is one of the first European markets where Polestar will move to a non-genuine agency sales model. Polestar’s UK retail partners will be able to actively sell from each Space enhancing customers’ overall experience. Customers will still be able to configure and order their Polestar online, as well as through the expanding network of Polestar Spaces, making it easier for more customers to buy and own a Polestar.
The brand’s plan is to expand its nine existing Spaces to 17 by 2026, supporting its product roll-out over the coming years. That should help boost its sales. Since the introduction of the Polestar 2 in 2020 – it’s most successful vehicle – the brand has delivered more than 30,000 of the electric fastback to UK customers. That’s the power of digital-led sales.
Changing face of sales skills
The shift to agency and digital sales affects approximately 135,000 dealership roles in the UK. Sales is becoming more consultative, focusing on experience, not negotiation, while order fulfilment and digital engagement teams are growing – managing online leads, virtual handovers, live chat, and omnichannel interactions.
So while you could be a Sales Executive now, in the future that could become a Customer Experience Advisor, and if you’re hiring for a Sales Administrator today, it could be you need a Digital Sales Coordinator in the future.
Shifting roles
|
From |
To |
|
Sales Executive |
Customer Experience Advisor |
|
Sales Admin |
Digital Sales Coordinator |
|
Stock Manager |
Fulfilment & Logistics Lead |
|
Technical Sales |
Product & Technology Advisor |
|
Receptionist |
Online Customer Engagement Agent |
"The agency model is transforming not only how vehicles are sold, but how the workforce interacts with customers, technology, and brand identity"
These aren’t simply new job titles, they reflect a fundamental shift in what matters; experience, product fluency, and digital competence over traditional sales techniques.
The agency model is transforming not only how vehicles are sold, but how the workforce interacts with customers, technology, and brand identity. Chinese OEMs are helping set the pace with clean-sheet, digital-first strategies that bypass legacy constraints. EVs are part of the story, but digital transformation, e-commerce expectations, and operational efficiency are driving just as much change.
For the UK sector, the path forward is not about shrinking the workforce, but reskilling and redesigning roles to meet this evolving model. From forecourt to fulfilment centre, the focus is now on technology, consultancy, and customer connection.
Insights by IMI: Driving Auto Forwards
As the automotive industry evolves, identifying and addressing the key drivers shaping the future skills landscape is crucial. Discover the IMI's new series of insights and take a deep dive into the future requirements for the automotive sector and how action now can placate any challenges and ensure the sector remains a vital component of the UK’s economy.
Uncover the latest IMI Research and stay ahead of the sector's biggest trends
Built with Shorthand