Stellantis is bowing to dealer pressure to scrap the rollout of an “agency model” restructuring of its European network first instigated by its ousted CEO, Carlos Tavares.

The system gives the automaker direct control of sales transactions and prices, as the contractual partner with customers, while dealer responsibilities are limited to deliveries and servicing.

Many dealers balked at the change, arguing it compressed their margins still further in challenging economic conditions.

Now Stellantis’ chief operating officer for Europe, Jean-Philippe Imparato, tells dealers at an event in Verona, Italy, that the company is suspending the plan in Europe, with sales networks sticking to the traditional dealership framework, Reuters reports.

However, the system has been working in Austria, Belgium, Luxembourg and the Netherlands since 2023 and will remain in place for the time being.

Tavares had instigated the plan in 2021 as a way to cut costs and support investments for electrification.

Imparato also says Stellantis will soon come up with a new business strategy to support automotive manufacturing in the European Union where the challenges include high labor costs and onerous regulation.

Among its calls for change will be an EU-wide scrappage scheme to help replace vehicles older than 10 years and government contributions for electric-vehicle battery production in Europe of €40 ($44.80) per kilowatt, worth almost half of the total manufacturing costs.

In Italy, Stellantis will soon present an update to the plan it announced in December to increase auto production in the country, Imparato says.

He adds that “a few things have changed since then,” including EU's decision to give automakers three years to comply with emission rules initially set for 2025.

The update, aimed at enhancing the plan for Italy, will include areas such as engines, as well as Stellantis's struggling brand Maserati. “We will discuss it with the government soon and then we will present it, in June, or even before,” Imparato adds.