BMW has taken a different approach from Volkswagen when it comes to digital business models, frustrating some European dealers who say the automaker should offer them more financial incentives.
While other markets signed onto a contract presented in August, dealers in BMW’s home country resisted. The German dealer body association refused to approve the new contract all the way up to the deadline this month and even took the conflict public. BMW’s efforts to expand its own sales and service activities had “grave effects” on their businesses, in which they invested more than $350 million, they argued.
As evidence, they said BMW had circumvented them earlier this year by agreeing to sell roughly 15,000 vehicles Europe-wide annually to the parent group of a major supermarket discounter. These cars would then later be remarketed as used by the chain itself, creating fresh competition.
While Volkswagen’s new Europe-wide deal ensures dealers will profit from services VW directly sells to customers via its digital platform, BMW’s German retailers slammed the group for failing to offer similar compensation.
The dealers also said BMW unilaterally claimed the right to share customer addresses and leads they generated with its subsidiaries, and they fear those companies could then operate in direct competition with them.
BMW dealers claim to already earn the least among premium brands, even before the new contract was presented.
“Lowering profits further endangers the economic existence of the BMW partners,” the association said in a statement sent to Automotive News Europe.
Eventually, BMW said, the dealers went along with the agreement, which was required to keep selling the brand’s vehicles. But the dealers association says it still aims to change the terms in further talks.