Why the National Sales Companies are the focal point of agency transformation

In the ever-evolving landscape of automotive retail, several car manufacturers are strategically redefining their sales model by transitioning from the traditional franchise dealer system to the agency sales model. The agency model empowers manufacturers to connect directly with consumers, presenting significant opportunities but also a clear challenge in implementation, with a potentially high cost of failure.

It is a paradigm shift in the automotive industry, and BearingPoint’s study, “Wholesale change – The agency implementation challenge,” takes a deeper look into the current challenges that many OEMs are facing with the implementation of the Agency model which has led to several of them announcing programme delays. The study looks at the National Sales Companies (NSCs) as a focal point of the complexity, where a fundamental shift is required to become an agile B2C retail organisation, which is a significant transition from their current wholesale role.

NSC transformation

The principal difference between a franchise and agency model is that the manufacturer contracts directly with customers and the retailers act as “agents”. However, the broader impacts are wide-ranging, and this brings a host of responsibility changes across the sales process that call for new capabilities at the NSC. Many of these changes come through the NSC absorbing activities from their retailers which adds further complexity and risk.

To bring this complexity to life, the study identifies ten critical impact areas, from evolving sales organisations and embracing the new customer data, to managing stock and recalibrating pricing strategies.

Mind the gap: NSC impact areas

The key impact areas and critical challenges for NSCs in the wholesale transformation process are:

  • B2C sales organisation: NSCs must evolve from supporting wholesale channels to establishing direct sales organisations capable of managing omnichannel customer journeys.
  • Data analytics and insights: NSCs must become agile, data-driven organisations, leveraging advanced analytics and AI to understand and personalise customer experiences.
  • Lead management and conversion: NSCs must enhance lead management processes to maximise conversion and minimise leakage, focusing on outbound contact in omnichannel purchase journeys.
  • Customer experience management: NSCs must proactively manage customer experiences in real-time, monitoring online and physical retail channels to ensure a consistent brand experience.
  • Tactical marketing: NSCs will take over tactical marketing from retailers, necessitating new operational marketing skills and local market knowledge.
  • Pricing: NSCs must adopt a more agile and data-driven pricing approach, aligning with the consistent and transparent product pricing of the agency model.
  • Sales planning: NSCs’ planning cycles need recalibration for faster sales drumbeats, enhanced short-term forecasting capabilities, and potential leverage of AI.
  • Stock management: NSCs will take on the cost and management of in-country stock, requiring enhanced visibility and location capabilities to manage stock turn and aging.
  • Captive finance company: NSCs must recalibrate finance partners’ products and processes to align with the new direct-to-consumer contractual model and associated customer journeys.
  • Retail sales culture: The success of NSCs’ transformation hinges on a cultural shift towards a retail mindset, embracing the faster “clock speed” of direct-to-consumer operations.

Your roadmap to success

We know that a successful agency implementation will likely be incremental and iterative. The NSCs need to bring in new B2C retail skills to bridge the gap in retail expertise and local market knowledge to support activities that they now own. The model itself will need to be adapted to each organisation’s strategy, processes and system architectures, and this too will require effort on a continuous improvement basis. However, a successful implementation will see the agency NSCs transform to become data-driven retail-centric businesses that can sense and respond to changing customer and market dynamics and fine-tune their capabilities accordingly.

Access the full study here to explore the key impact areas, and please get in touch to discuss the themes in more detail and associated transformation considerations.

  • Study: Wholesale change - the agency implementation challenge
    Study: Wholesale change - the agency implementation challenge 2.14 MB Download

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