Probably not. Most dealers say they have enough to worry about without taking the risky step of moving into a rival group’s area to compete head-to-head. Margins are too slim to allow this level of competition. Anyhow, most dealers already compete on a national level through their websites –a much more cost effective approach.
As ever, the one group that might look to take advantage of the new legislative landscape is Pendragon, but Trevor Finn would need to carefully pick his fights – delivery points in city centres, perhaps. That might explain his new rebranding policy, which is focusing on renaming outlets Stratsone or Evans Halshaw. In order to take advantage of location clause by opening delivery points, you need a strong brand from which to trade. Watch this space.
British retailers are in the strongest position to take advantage of the scrapping of the clause, if they are considering a move into mainland Europe. They have been through the consolidation, which is yet to happen on the continent.
Last year they sold an average of 444 new cars per site, compared with 330 in Italy, 236 in Spain, 173 in Germany and 158 in France. These countries still have lots of smaller dealerships, and experts suggest that they will go through a similar experience to the UK, with larger groups, perhaps some from this country, mopping up smaller sites.
This overlooks one important fact: Britain is a small island, most mainland countries are far bigger with a much wider population spread.
France is more than three times the size of the UK, with roughly the same size population. City centre locations will be attractive, but it will be piecemeal expansion. Unless consumers are willing to travel for several hours to buy a car, these smaller dealerships will remain: consolidation does not work in this model.
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