Jaguar Land Rover (JLR) is canceling its dealership contract in the UK

During its annual meeting, manufacturer Jaguar Land Rover (JLR) announced its intention to move away from the agency model and instead refocus on a traditional dealership model while combining it with “a high level of customer service for customers “. A decision that could spread to Europe and indeed to France. Therefore following the decision of the French management of JLR.

The first manufacturer to officially reject the agency contract

According to information reported by Car Dealer News, the brand worked directly with distributors, revealing its new organization. Note that like other manufacturers such as Stellantis, Volkswagen and Mercedes, JLR has been working on the transition to dealerships for more than two years and had previously planned to move to a “direct to consumer” model this year.

Distributors applaud this wise decision

Patrick McGillycuddy, Managing Director of JLR (UK), said the decision to leave the agency and focus on a refreshed franchise model was made because of: “Continuing internal and external challenges, and the level of change required to maintain and sustain a sustainable business. profitable.” It should be noted that distributors and dealer group leaders from Sytner Group, Hatfields and Vertu Motors have all undoubtedly supported the decision to engage with the reworked sales model.

“JLR should be commended for responding to the rapid changes we have witnessed in the new UK car market,” Darren Edwards, managing director of Sytner, was quoted as saying. He added: “The franchise model is a proven and reliable model, which can be intelligently adapted to meet the needs of all stakeholders involved in the new automotive business, ie customers, retailers and manufacturers.

A strict plan in France was announced in 2022

As a reminder, in October 2022, JLR announced to its French distributors its intention to significantly reduce the number of distributors of the two brands while halving the dealer payments. In terms of the number of investors, Jaguar Land Rover wants to significantly reduce the number of points of sale of the Jaguar brand. We can go from about fifty points of sale for 35 investors to about twelve points of representation in France. The aim will be to transform Jaguar from a premium brand to a luxury brand based on Bentley’s design. Jaguar’s network would move from a select distribution contract to that of an agent, the manufacturer wanting to have direct sales while controlling sales prices and payments.

Making Jaguar “a luxury brand like Bentley”

Payment is another major issue in the discussion between the manufacturer and its networks. Jaguar Land Rover announced that payments would be halved in the future to 8%, i.e. 4% of invoices and other changes. In return, the manufacturer would undertake to take over the stock management and marketing costs, i.e. 350 euros per vehicle or, in the end, an amount of 1.5%.

Salary down to 8%

For brand distributors, obviously the account doesn’t exist! This subject of payment can be a major point of restriction and tension. To explain this drop, the manufacturer reminded its dealers that it was no longer possible to offer 6 to 7 discount points when selling a car.

Land Rover: contract distribution to choose from about twenty plates

At the Land Rover level, in addition to the reduction in premiums, the manufacturer would maintain a selective distribution contract while reducing the number of plates by around twenty but maintaining approximately the same number of points of sale (70 points of sale). These Land Rover plates would eventually sell between 400 and 500 new cars a year. The Land Rover dealer will also have the possibility to take on a dealership contract for the Jaguar brand.