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Carmakers see retailers as 'slaves in showrooms'

Trevor Finn, Pendragon chief executive, said the wait for the Competition Commission report findings, expected in the next month, was causing great uncertainty.

“We are seen as having a cosy relationship with manufacturers,” he said. “But while some of them are responsible, others are irresponsible, so there is a Jekyll and Hyde approach to distribution.”

Mr Finn said some carmakers lived in a time warp with their approach of getting cars into the market at any cost. “Car dealers are the slaves in this because most showrooms lose money,” he said. “Many dealers are subsidising new car sales, which is ridiculous, but someone is making money.

Customers couldn't care less about any of that because they want cars at the right price.

“Some will take a test drive at a dealership and then buy over the internet. So dealers must stay in line with consumers if they want to stay in business. People need to try to trust dealers, otherwise they will find they have less choice.”

Mr Finn said online sales generated part exchange cars and people needed to work out finance on cars they bought. “There is a role for people like us,” he said. “We are the people who provide the fulfilment and the internet can prove it.”

But he believed UK dealers were in a weak position because manufacturers could terminate them without just cause. That could not happen in the US where dealers were protected by major contractual agreements.

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