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RMI Dealer Attitude Survey shows rising confidence despite falling margins

The new Block Exemption Regulation has given franchised dealers cause to remain hopeful in the face of falling margins and increasing manufacturer control according to a new survey, soon to be published by the Retail Motor Industry Federation.

The RMI's Summer 2003 Franchised Dealer Attitude Survey, to be published this month, shows that dealers remain confident despite an uncertain economic climate. They see an increase in profit potential, regardless of continually decreasing margins. The survey shows:

- 80% of dealers say average retained margins have fallen over last 12 months

- 63% of dealers believe that profit potential has risen in the last year

- 70% of dealers expect an upturn for future profit potential in the next 12 months

As margins have fallen, manufacturer control has been perceived as increasing. However, a large percentage of dealers are willing to live with this, and feel that they have a good relationship with their manufacturer.

- 97% of dealers believe that manufacturer/importer exerts a considerable amount of control over their business

- 90% of dealers believe that manufacturer control will increase in the next 12 months

- 63% of franchised networks surveyed believe business relationship with manufacturer will improve over next 12 months

This increasingly close relationship has resulted in some improvements for dealers. Parts distribution has been a big problem for dealers in the last few years, but 63% of dealers actually reported an improvement in parts distribution.

Commenting on the survey, Alan Pulham, RMI franchised dealer director said: “Dealers feel that benefits realised from the new Block Exemption Regulation will translate into improved business opportunities over the coming year. However, the level of competition in the UK market is now so intense that it is more important than ever that manufacturers and networks develop true mutually beneficial partnerships.”

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