The boss of £1.3bn turnover Reg Vardy plc believes the only way manufacturers can reduce distribution costs is by forming partnerships with a number of large retail groups and he called for a closer dialogue between the two sides of the industry.
To position itself for the change Mr Vardy foresees, Reg Vardy is investing more than £1m in an internet initiative and call centre as part of a programme to build a powerful national retail brand.
'Reg Vardy' will be promoted as a single contact point where people will be able to buy new and used cars, warranties and service points.
Peter Vardy said only leading AM100 groups - and not dotcom new entrants or manufacturers - could provide the level of service people demanded.
“We can't go on as we are now, with preregistrations and other deals to maintain the artificial market which has existed for 10 years,” said Mr Vardy. “We need to see more pulling by dealers and less pushing by manufacturers. “The industry is selling cars to rental companies and other fleet operators, and then buying them back to sell at the right price. “This goes back to 1989 when manufacturers failed to reduce production as demand slowed. The position we are in is unsustainable, but no manufacturer will bite the bullet and reduce output.”
Mr Vardy said he did not want a confrontation with carmakers but Richard Lownsbrough, who controls Vardy's used car retail stock, was critical of some of them. Speaking at Used car crossroads, Automotive Management's spring conference, Mr Lownsbrough said the market was suffering from an increase in poorly-managed preregistrations pushed to dealers by manufacturers which had “created a confidence gap” among customers.