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Danger warning over common brand move

Ambitious plans by Ford's Premier Automotive Group to maximise distribution efficiencies in Europe are unlikely to please everyone.The new Common PAG Brands Unit will lead to a network of multi-brand superdealers selling Volvos, Land Rovers and Jaguars - and maybe Aston Martins. National sales organisations for the brands could also be merged into a single PAG operation.

But some commentators warned against too radical an approach. Alan Pulham, director of the franchised division of the RMI, says: “The risk you run with this type of strategy is you take the focus off specific brands. It is risky, both for dealers and for the manufacturer. The reason why Peugeot and Citroen have both done so well is that they have kept the brands absolutely separate at dealer level.

“You are in danger of reducing sales to the lowest common denominator. All of PAG's brands have different ambitions and sales targets in different territories - so you cannot merely have a network of Jaguar/ Volvo/Land Rover superdealers, as each brand needs different representation.”

The PAG dealers chosen to develop a 'superdealership' will also be asked to make massive investment in premises. Speaking in America, outgoing PAG chief Wolfgang Reitzle said: “We are pleased to find more and more courageous entrepreneurs who really invest a lot of money into the new dealerships.”

Although the US sites are likely to be on a greater scale than those in Europe, there is no doubt that the British PAG dealerships will be expensive to develop. PAG will also encounter difficulties if it wants to scrap separate national offices for each brand, say experts.

Automotive marketing expert Steve Saxty of Future Brand, said: “Reitzle has failed to realise you cannot dictate a concept to local sales companies which have good reasons to retain their single franchised networks.” But such criticism is unlikely to dampen spirits at PAG, which has ambitious profit targets to reach if is to meet Ford Motor Co targets. PAG bosses believe they have the best combination of luxury car brands in the world, and have a once-in-a-lifetime chance to revolutionise distribution.

Reitzle had acknowledged that the PAG superdealers would be asked to invest a significant amount of money in the new sites. But they would also inherit three first rate luxury franchises which complement each other extremely well, he claimed. PAG's North American operation is well ahead of Europe in terms of rationalisation.

All four brands have moved to a new California headquarters, and multi-brand superdealerships have started to open. Most recently, Sytner parent company United Auto Group opened a huge PAG dealership in Phoenix. Among the dealer groups expected to gain major new PAG franchises in the UK are HG Owen and Reg Vardy.



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