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BMW dealers iron out new franchise contract concerns

BMW dealers in Germany are hopeful of still negotiating improved terms despite having signed new franchise contracts which they said could erode their profits.

Other markets in Europe signed onto a new five-year contract the carmaker rolled out in August, however BMW’s home country dealers had resisted until mid-October, due to concerns over data sharing, online services and efforts to expand BMW’s own sales channels are adversely affecting its franchisees who have invested heavily, according to reports in Germany’s Sueddeutsche Zeiting.

The German dealers said BMW’s contract 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, according to reports.

Like most car brands developing mobility and digital solutions, BMW desires a closer direct relationship with consumers to offer additional services, such as increased connectivity and remote software updates which typically form part of a physical annual service.

It currently operates an online new car sales channel in the UK, which is fulfilled by its dealers.

In 2017 the BMW UK dealer network suffered poor average profitability, and some franchisees reported a loss in their statutory accounts.

The German dealers’ association eventually published a statement that “we trust our manufacturer” and says it still aims to have further talks about the terms.



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