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Multi-franchise model tried and tested in Jersey

A multi-franchised showroom in Jersey could point the way forward for dealer groups in large cities and conurbations post-block exemption.

Jacksons (C.I.), part of the Bournemouth-based Jacksons Group, recently moved into a new showroom which houses Mercedes-Benz, BMW, Chrysler Jeep, Mini and Smart under one roof. There is no segregation between marques, and customers are free to look at cars in an open plan environment, with salesmen helping them to make comparisons between rival models like the C-class and 3-series.

It's a situation the European Commission and consumer bodies want to see across Europe, and one that appears more likely under revised block exemption. They claim multi-franchised showrooms will increase competition and lead to lower prices. But Jacksons, which has been retailing Mercedes and BMW from the same premises since the 1960s, believes the impact would be minimal.

“Most customers don't use the opportunity to compare cars and prices - they know what they want before they come to the showroom,” says Tom R Scott, Jacksons' chief executive. “Some may look at other models, but only for their own confirmation.”

Jacksons, which has a similar multi-franchised site on Guernsey, employs dedicated sales managers to oversee each marque. Sales staff also specialise in one brand but are trained to sell across other product lines, enabling them to cover for illness or holidays. If they do sell on another product, they earn less commission, which avoids them channelling customers towards the marque that earns more money.

“Price of land on the islands is expensive, similar to London, but the volumes are lower,” says Scott, whose business sells around 200 Mercedes and 200 BMWs a year. “Manufacturers recognise that if we combine brands under one showroom we can offer an excellent, high profile facility, but if we had to invest in several small sites, they would be less impressive.”

Scott says the key benefit of multi-franchising is in the aftermarket operation where workshop facilities and equipment can be shared, cutting costs. But he rules out adding franchises to the company's three mainland Mercedes dealerships due to the cost and difficulty of training staff in every marque.

DaimlerChrysler too says it has no plans for similar agreements on the mainland. The company points out that post block exemption, it would remain carmakers' decision whether to allow multi-franchised showrooms by choosing either selective or exclusive distribution for their dealer networks.

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