Currently reading: Car sale conversion rates stronger for agency model, says Polestar UK CEO
Success in this new way of selling cars will come down to customer experience

Conversion rates for car sales are better under the agency model than the traditional franchise model, according to Polestar UK CEO Jonathan Goodman.

Talking on today’s Autocar Business webinar on the topic of the agency model, Goodman said he has seen a 10% to 13% conversion rate, with that figure based on a sale within 60 days of the first time a customer touches a Polestar (for example, in a showroom, a test drive).

“If you count every person walking into a dealer [for a franchised model], it’s probably about 10% conversion rate,” he said. “We’re a new brand and to be at that conversion rate as a new brand which isn’t very well known is a very healthy position. We’ve looking to increase that rate moving forward.”

However, Duncan McPhee, COO of Lookers, which uses Polestar’s agency model alongside the franchise model for other brands, said there hasn’t been a marked change at Lookers: “We’ve not seen much of a difference looking at conversion on the franchise model where customer deals with us directly compared to that of an online model. There’s not a huge difference."

He added: “But we have seen an uplift on customers taking finance online. That conversion has definitely improved but not the conversion for enquiry to sale.”

The agency model, in which a car has a fixed price and a customer places an order directly with a car maker (often online), which then provides a fixed commission to the relevant local retailer, lives and dies by customer experience, said Goodman, McPhee and the seminar’s third speaker, Tony Whitehorn, automotive consultant at Endiva, who previously worked for Hyundai and Toyota.

Whitehorn said: “All the research shows consumers like [the agency model]. Consumers don’t enjoy going into dealerships and haggling. And we now buy a lot of things online. With the agency model, you can do it online, and then a retailer can deliver the car. The customer will drive this change, and the customer wants transparency and surety.”

McPhee added: “It’s a very simple, transparent model. Customers like ease and to have transparency. It’s very, very profitable. It’s about delivering better customer experience, reducing distribution costs in the network and having a more transparent way of interacting with customers.”

Add a comment…

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Reset your password

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

A link has been emailed to you - check your inbox.



Don't have an account? Click here to register

Privacy Notice

Haymarket Media Group, publishers of Autocar Business, takes your privacy seriously. Our Automotive B2B brands and partners would like to keep you updated by email, phone and SMS with information and opportunities which we hope will help you in your work. Learn more about how we use your information when creating an online account. We believe we can demonstrate a legitimate interest in using your details for marketing messages, but if you do NOT wish to receive these messages, please click here.

I DON'T want messages from Autocar Business or other Automotive B2B brands via the following channels:
by email       by phone       by SMS

I DON'T WANT messages from you on behalf of your trusted partners via the following channels:     by email

We will use your information to ensure you receive messages that are relevant to you. You can unsubscribe at any time. Please see our Full Privacy Notice for more information.