Currently reading: Why Toyota could be next to adopt the agency sales model
Selling cars directly to the customer, rather than through a dealer, may soon extend to mainstream manufacturers

Toyota could join the ever growing list of car manufacturers that are switching to the ‘agency’ or direct sales model.

“Every part of our business is going to get turned upside down,” the brand’s head of Europe, Matt Harrison, told the Automotive News Europe Congress recently. “The existing distribution margins and models are undoubtedly not sustainable.”

The shift to the agency model has become the leading topic among dealers in recent months as they try to work out the impact on their profitability when car makers move away from the decades-old wholesale business model, under which dealers can choose to sell at full list or stimulate greater demand by discounting that price.

The wholesale model benefits outright sales, but as companies scramble to improve profits on more expensive EVs, they are questioning whether they really need to give away all that margin to dealers and country-specific national sales companies – “legacy margins that are 20-25%”, said Harrison.

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