Fleet vehicle deliveries suffering from agency model, says AFP

Fleets are complaining of a fall in delivery standards, with electric vehicles (EVs) arriving with little charge and internal combustion engine (ICE) cars with only a small amount of fuel.

The issue, according to The Association of Fleet Professionals (AFP), is confined to those manufacturers that have switched to an agency model, which its members say results in a much reduced incentive for the local dealers to maintain a high level of service to fleets.

The agency model is a distribution strategy where the OEM is the legal and primary seller of vehicles to the consumer, with the dealer acting as an ‘agent’ for the OEM in selling and servicing vehicles.

For a number of brands, including VW Group, fleet sales are already processed via an agency model.

Key characteristics of agency, in its purest form, include OEM vehicle ownership as well as their control over national pricing.

Paul Hollick, chair at the AFP, said: “We are hearing stories, for example, of prestige EVs being delivered with almost no charge and similar situations for petrol cars, which is obviously annoying for the fleet customer who has ordered an expensive, high-quality asset and expects commensurate standards.

“It’s inconvenient and leaves a poor impression.”

Hollick explained: “Under the old system, fleets would simply take their business to another dealer holding the same franchise but now that is not really possible, with the local dealer effectively having a monopoly over local deliveries.

“At least one member has complained that they have just placed more than half a million pounds worth of orders with a manufacturer in the full knowledge that the local dealer will make very little effort when it comes to delivery.

“How this situation is resolved is difficult to say although there are some signs that the future of agency within the motor industry is in flux.

“It certainly adds to the long list of gripes that fleets currently have when it comes to their relationships with some manufacturers.”

The AFP operates a 28-point Dealer Standard, designed to ensure that fleet cars and vans are delivered in excellent condition to the end user, who is then shown the fundamentals of how to operate the vehicle and always treated courteously.

Hollick said: “Several major dealer groups have signed up to this accreditation since its launch in 2022 and it is working well in those instances.

“One potential solution would be for manufacturers operating under agency arrangements to ensure all of their dealers comply with the AFP standard.”

For more from Fleet News on dealership agency model plans, click here.