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Greater choice gives dealers the edge in import/internet battle

Franchised dealers can win the battle against the dotcoms and the car importers by offering greater choice – as well as competitive pricing.

A study by Car Price Check - covering some 3,711 models and seven million car prices - shows that 16% of models are cheaper in the UK when compared to Europe; 4% of models only deliver a negligible benefit (less than £500) when bought from importers and 25% of models are more competitively priced from Europe.

Steve Evans, CEO of Autohit which operates Car Price Check, said: "There are models that are cheaper from importers, but there are just as many that are cheaper from UK suppliers, and the size of those savings mirror each other. It also shows that dealers can offer something importers can't - choice.

"Just as importers and internet suppliers aggressively market models where they can actively compete with UK dealers, the latter should and can quite easily do the same - as long as they are aware of the models which present them with the best profit opportunities."

The data shows the general competitiveness of UK dealers on segments A, B and C, but visible differences between manufacturer brands on segments D and E.

For example, where Ford dealers are able to supply 40% of Fiesta models cheaper than Europe, they can only beat importers on just one model from the Mondeo range. Conversely, whilst Toyota struggles to compete on the Yaris, its Avensis upper-medium entry is cheaper than Europe on 40% of derivatives with a further 8% only showing a negligible benefit when imported, Car Price Check reports.

"When you consider that segment D accounts for 21% of the market, if manufacturers addressed the price competitiveness of its dealers for the private buyer, the threat of imports would be squeezed even further," said Evans.

Comparing manufacturer by manufacturer, Citroen and Fiat are the undoubted consumer champions. The French carmaker was cheaper on 71% of its range than Europe, with Fiat delivering the same trend for 70% of its models.

Other strong franchises were Skoda, Renault, Vauxhall, Mazda, Seat, Nissan, Audi, Chrysler, Lexus, Toyota and VW.

Of the big three in terms of unit sales, Ford faired the worst, says Car Price Check.

Only 6% of its range could be found cheaper in the UK, whereas Vauxhall and Peugeot matched the national average of 16%. That said, Ford dealers display a willingness to offer discounts of between 8-12% which may suggest that a further realignment of list prices would bring them on par with the transaction prices of importers.

The majority of import savings are still restricted to the executive end of the market. Dealers from BMW and Mercedes deliver savings over importers on just 3.9% and 6.4% of models respectively.

There are a handful of brands that remain unaffected by price competition from alternative channels with the latter failing to supply any models into the UK market. These were Honda, Daewoo, Hyundai, Suzuki, Mitsubishi, Kia and Subaru.

  • The data analysed represents seven million prices captured from UK dealers, internet retailers, manufacturers and importers between November 2000 and April 2001.
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