The Agency Distribution Model - What Could The Future Hold? The traditional automotive distribution model has long been dominated by the franchise system. However, in recent years a new model has emerged - the agency distribution model. In this video, we explore what exactly the agency model entails and how it differs from the established franchise approach. The agency model essentially means that automakers appoint independent dealers to represent their brand, rather than setting up an extensive franchise network. Dealers have more flexibility in how they run their operations under this model. However, they also take on more business risk without the franchise protections. How might the rise of agency distribution impact the future automotive landscape? In slower growth markets, it could allow brands to expand their reach more rapidly. Dealers may also be incentivized to invest more in their retail experience to differentiate themselves. However, in high sales regions, established franchise dealers will likely maintain control over the most lucrative markets. The agency model isn’t the only shift happening in automotive distribution. Car sharing services and subscription models are also starting to emerge. Under a subscription plan, customers pay a monthly fee to access a vehicle rather than owning or leasing long-term. Could this replace traditional distribution channels in the future? While still a niche model, subscriptions offer an alternative ownership structure that some see as a better fit for the shifting mobility landscape. The growth of electric vehicles could also disrupt established distribution networks. New EV makers are pursuing innovative sales models based on online transactions rather than physical dealerships. As the economics of EVs evolve, distribution models will need to adapt as well. In summary, the agency model marks an evolution in automotive distribution - but is unlikely to completely replace the franchise system anytime soon. However, changing vehicle technologies and ownership models will continue to challenge conventional distribution over the longer term. This video provides perspective on how networks could shift to align with emerging trends in mobility.