Dealers fight back

Pendragon, which tops the AM100, is to lead the motor retail group fightback against the growing wave of internet-linked cut-price car sellers.

Freeserve, floated off from the Dixon High Street retail group, this week announced it is also to sell cars. The latest new entrant was named as Pendragon prepared to launch a nationally branded internet site to sell new and used vehicles.

Chief executive Trevor Finn said he intended to beat new entrants by combining the £1.8bn turnover group's dealer network with the potential of online information.

Mr Finn said: “By centralising some admin functions in our call centre, we have a business model to deliver the UK's first comprehensive online vehicle retail capability.”

He is one of the senior AM100 executives viewing internet specialists as a major threat to the existing retail structure.

Reg Vardy plc is launching an online service aimed at former company car owners likely to buy without entering a showroom. Chairman Peter Vardy expects a split between them and more traditional retail customers.

Dixon Motors has a link with Virgin Cars though chief executive Paul Dixon has not yet revealed full details. The battle will be between large retail groups offering an established service to retail buyers and the attraction of cheaper unofficial imports.

David Maxwell, an RSM Robson Rhodes motor industry adviser, said: “Established car retailers have to fight back using their reputation and high street retail skill and experience. “Dealers will experience pain as more independent websites open in the UK. Their ability to provide information on competing models, finance, order arrangements and delivery to your door, are attractive.

“But the UK's largest dealer groups are to be congratulated. Most have a website and some are better than those in the US.”

Management consultancy Cap Gemini believes internet selling could reduce the average retail price of a car in Europe by up to 20% by slashing distribution costs. It forecasts that by 2003 dealers will account for 60% of car sales, virtual marketing channels 15% and independent distributors 25%.