'OEMs are now going to have to play fair'After years of having it their own way, OEMs are finally going to have to play fair and put the consumer first. The days of exclusive manufacturer-defined territories, one brand per site and authorised service only from dealers tied to warranty will soon be a memory.
So why aren't the dealer groups creating cross-manufacturer multi-branded dealerships, to give their customers the choice and convenience previously denied? They certainly need something to fill the profit gap that will be left when non-retailers inevitably start offering authorised service.
There are two explanations, yet each has only a limited shelf life. First, dealers remain wary of upsetting OEMs. Second, OEMs are incentivising retailers to preserve the status quo. Perhaps, in their hearts, the dealers know their own brands aren't up to the job.
In today's dealer groups different strategies are being tried out. A surf through the several websites reveals a lack of consensus: some allow the OEM brands (typically the prestige ones) to take the limelight, differentiating between them by location only; others have retained their regional brands, believing they command consumer loyalty; the rest are using acquired brands to try to group together marques in the same segment. Although some may sell all marques (at last count 16) under the founder's name, most mix all three approaches, resulting in consumer confusion.
The fact is that no-one bar perhaps Lex Service, who saw the writing on the wall and began their transformation from a car retail group to a service company, has yet seized the opportunity offered by block exemption relaxation. Today, the way is open for the development of a dealer brand that not only stands for and offers something consumers want but aren't currently getting – namely choice, convenience and service – but also has the potential, through the re-positioning of its brand, to grow into other sectors.
Who's it to be? Until someone rises to the challenge, the winners will be the internet retailers, laughing all the way to the bank and only pausing to thank dealer groups for the provision of free showroom facilities.
Ian Louden, consultant at brand consultancy FutureBrand