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Franchises: a third tier emerges

Britain may be heading for a three-tiered franchised dealer system, despite recent efforts by carmakers to develop single-tier networks. Industry figures say new chains of small, independent 'retail' dealers - reporting into main dealers - are already emerging in response to market changes.

But they are also predicting a new tier of superdealer, which will buy cars in bulk from manufacturers before distributing them to main dealers across the country. These superdealers will be able to negotiate big discounts - similar to those given to major fleets.

Nissan and Ford are among the manufacturers actively appointing networks of sub-dealers - traditionally called retail dealers - in a bid to remain in contact with customers outside the main conurbations. In the 1950s, there were thousands of such dealers providing service, repair, and limited sales functions.

Nissan Motor GB has begun piloting a network of retail dealerships which will support main Renault/Nissan dealers within expanded market territories. The retail sites will fit into Renault/Nissan's pan-European franchising strategy, which seeks to develop a hub-and-spoke system of dealers.

“We want good coverage across the UK marketplace,” said Simon Rutherford, director of Nissan Motor GB. “Within the Renault/Nissan structure, we look at what's best for each territory, and that means retail dealers reporting into a main dealer can make good sense. We have spent 18 months developing our retail strategy, and while we are aiming to grow with fewer, stronger retail partners, it became very clear we could not eliminate good, independent, local Nissan and Renault dealers.”

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