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Suzuki to fill London gap with own outlet

Suzuki GB is planning to acquire a site within the M25 that it will leaseback to a franchised dealer, similar to the sponsored retail programmes favoured by VW Group. The UK arm of the Japanese carmaker is waiting for the green light before moving to acquire a site in London.

If the strategy proves successful, Suzuki could open a second site in central Manchester but it is unlikely to expand the programme elsewhere. Both dealerships will be in strategically important, but high-cost, conurbations, where lower volume carmakers find it difficult to get representation.

“We are currently working on a strategy to acquire a site in the London area and lease it out to an operator,” says David Seward, Suzuki GB sales and marketing director. “This will give us the security of representation.”

The number of dealers in the London area has been declining across all franchises over the past 20 years because of rising property prices, although the growth in carmaker sponsored retailer programmes has helped to address the problem. If the programme goes ahead, Suzuki will join Kia and GM Daewoo who last year dipped (in Daewoo's case returned) into retailing. With open points in Harrow, Kingstone and Croydon, the Suzuki is looking to attract new owner-drivers to the network. Entry costs to the franchise range from £35,000 to £50,000 depending on size.

Despite limiting the number of wholly-owned sites, Suzuki needs to boost network coverage in time for a new product offensive. It currently has 147 franchised sites and is looking for a network of 155 as it strives to achieve a modest sales increase from 36,000 to 37,000 units per year.

In the long term Suzuki aims to gain 2% market share, which would mean sales of between 40,000 and 42,000 units depending on the size of the new car market. Next year, the group will unveil the all-new Swift city car as well as an unnamed soft roader that will rival the Land Rover Freelander, Nissan X-trail and Hyundai Tucson.

In the latest RMI dealer attitude survey, Suzuki achieved a top three placing. Dealers in the network valued their overall relationship with the carmaker highlighting vehicle supply, market support, profitability and the warranty programme.

Seward adds: “Our excellent relationship with dealers is a key factor behind our record of consistent growth across the past 12 years, culminating in further record sales figures for 2003.”

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