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Market is 'ripe for super retailers'

Large dealer groups, rather than supermarkets and internet giants, could drive a new third tier of automotive super retailers predicted to emerge in the wake of block exemption revisions. The new breed would, effectively, wholesale cars to other retailers, say industry insiders. But one manufacturer source, who asked not to be named, says carmakers should be wary of such a move.

“It's good and bad news,” he says. “Good, because we would only be dealing with a few large players, and bad because it would depress margins and it could make it harder for manufacturers to police the retail network to make sure standards were being upheld.”

At the other end of the market, manufacturers now recognise they need to maintain a local customer-facing presence to complement main dealers - even though retail dealers have been out of favour for 15 years.

Robin Harries, owner of Ford dealer Arrow Motors in Pontllanfraith, South Wales, said the time was ripe to start building up retail networks. “With the rationalisation of dealer networks, some customers are now forced to travel 100 miles to find a franchised dealer. We are the only franchised dealer left in the Caerphilly area. There were at least 20 of us in the mid-1980s, supporting a rural area with a population of 60,000,” he says.

“We have been going since 1923. We know our customers well and are very adaptable to their needs. The supermarkets can't look after customers as well as we can. They cannot beat a local dealer who knows his customers.”

Alan Pulham, director of the Retail Motor Industry Federation's dealer division, says: “Manufact-urers are increasingly aware of the need to support main dealers with smaller sub-dealers. Ford, for example, has realised it needs to love its local retailers. These local business owners are real people living in real communities - not anonymous grey suited salesmen.”

Nissan has struggled to impose its new European dealer structure in France. In February Vincent de Laurens, managing director of Nissan France, quit following a protracted fight with his dealer network. Nissan has been embroiled in a legal battle with its retailers since it started to merge them with Renault dealers in 1999.

Across Europe, Renault and Nissan want a network of fewer main dealers operating both franchises within much bigger territories. This means many dealers have been asked to sell up their businesses as the consolidation programme moves forward.

Sources say Nissan dealers felt they were losing out when the majority of the new expanded sales territories were awarded to Renault dealers. They believed the value of the remaining Nissan dealerships had been undervalued by the car giant. Nissan denies the accusation.

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