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Byers warned over volume discounts

The Retail Motor Industry Federation has warned the Government its plan to introduce “volume related” discounts on wholesale car prices could eliminate many rural and provincial dealerships and rapidly reduce competition.

After last month's publication of the Competition Commission prices report, Trade and Industry Secretary Stephen Byers indicated prices should fall by around 10%. He wants carmakers to offer dealers who buy cars outright the same terms as major fleet customers.

Alan Pulham, National Franchised Dealer Association director, said: “Ideally, nobody should be getting better terms than the franchised dealers and all business should be conducted through them.

“Bringing all business back through the networks would result in a more controlled market and improve residual values.”

Mr Pulham said the idea of small dealerships creating buying groups to achieve volume discounts was adding complexity.

The RMI concern is shared by the Society of Motor Manufacturers and Traders whose chief executive Christopher Macgowan said: “The Government has to be careful not to disrupt the retail sector to the extent that small dealership and rural services are threatened.”

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