Alan Pulham, NFDA director, said many of his members were “still seething with anger” and some dealers were threatening to picket the gates of Forbes House, SMMT's London headquarters.
The dealers want to know why traditional 'bricks & mortar' retailers were not allowed stand space at the motor show, but internet-based retailers were.
Ian Lancaster, Virgin Cars chief executive, said he was aiming for 200 orders from the show to justify the cost of the stand.
Mr Macgowan, speaking at the Automotive Management motor show breakfast, said many dealers were developing their own e-commerce strategy and the industry had to acknowledge the “dotcom revolution”. He said it would have been “absolutely ridiculous for the companies not to be there”.
The SMMT allowed Virgin Cars to take up last minute sponsorship of the Star Studio display in aid of Ben, the motor industry charity.
Mr Lancaster said a manufacturer's dealer network should be able to take a stand at the show if Virgin and its rivals could exhibit.
“Manufacturers represent their dealer networks at the show and as such the dealers have a bigger presence here than we do,” he said. “Like us, manufacturers can take orders at their stands and pass them on to the dealer network. If anyone has any complaints about our presence at the show, they should direct them at the SMMT.”
Virgin was not the only dotcom company with a presence at the show – Showroom 4cars launched its internet-only special edition Ginetta.
Explaining the SMMT decision, Mr Macgowan said: “We welcomed them with open arms. I believe our decision was the right one and will be proven to be the right one as the dotcom businesses distil down to those that survive in the long term.”
Dealer anger has been stoked by the SMMT appearing to use the contribution to Ben to justify the Virgin Cars sponsorship.
Frank Sytner, Sytner Group chairman, said: “Of course, to exclude the dotcom retailers would be wrong but to deny the same opportunity to the 'real' retail industry is utterly indefensible. This has been badly handled.
“These interloper companies have made no contribution to our industry whatsoever and are here to snipe at, and possibly destroy, our retail business. Mr Macgowan should be concentrating his efforts on why it is possible for this situation to exist.”