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Dealers 'must guard against manufacturer stealth tactics'

A number of vehicle manufactuters are working to 'secretly' achieve vertical integration in their dealer networks.

According to the RMI, dealers are being encouraged to either sell their sites or sign pre-emption agreements giving first right of purchase of their sites to the franchisor.

“There is strong evidence that several vehicle manufacturers are working to achieve a significant level of vertical integration of dealer networks through stealth,” said Alan Pulham, the RMI's franchised dealer director.

“Either option places the dealer at a significant disadvantage in the relationship between "so-called" partners. Dealers are calling for more transparency and honesty in vehicle manufacturers' strategy on franchising for the future.”

“We are currently working hard to improve dealer rights under the next Block Exemption Regulation, and it is vital that dealers avoid entering into separate agreements that could negate any future gains. The offer to make a 1% investment in a dealer's business is no compensation for what could prove to be loss of control."

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