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Dealers told 'identify what makes you world class'

The process of change within the motor industry would continue to be driven by market forces but might be accelerated by revisions to Block Exemption, said Grant Thornton Motor Retail client services director Piers Trenear-Thomas.

“Market forces will prevail because they reflect what consumers want,” he said at the AM autumn conference, 'Beyond Block Exemption'. “Dealers should never respond to every possible threat, but pick a scenario or two and plan accordingly – identify what makes them world class.”

Referring to the fortunes of small and medium dealer groups from October 2002, Mr Trenear-Thomas said they would have more independence if franchise contracts were extended to five years.

A longer contract would, though, expose dealers to fluctuations in the fortunes of manufacturers. If dealers chose to concentrate on servicing cars – assuming the EC unbundled that from sales – they would need to have the right people in those departments. “This would really be a move from 'gin palace' dealerships to people,” he said.

Manufacturers wanted more direct sales, from their own retail sites and finance houses, and through e-sales. The move towards build to order would lead to more demand-pull and less supply-push. “This will lead eventually to fewer, smaller retail sites,” said Mr Trenear-Thomas.

He thought the move to replacing rather than repairing parts, longer parts life cycles, more parts and platform-sharing and other factors would lead eventually to more but smaller service shops.

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