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Hard work will pay off

Under-performing dealers are unlikely to get much sympathy from Renault UK’s managing director if the new car market continues to decline next year.

Although Philippe Talou-Derible recognizes that his dealers are forced to work harder to make sales, he says they shouldn’t forget that the tough conditions are being felt by the manufacturer too.

“You’ll always get some dealers who work hard and finish with a better market share, better profitability and a better business, but the whingers will have a bad year,” he says.

“If the market gets more difficult I might be a bit less patient with our whingers. I’m not trying to frighten, but I’m saying it’s difficult for everybody. It will be about us all pulling in the same direction rather than fighting against each other.

“2005 will be remembered as a difficult year. But the key question is about 2006, is it going to improve? My feeling is that it won’t, because of poor consumer confidence,” he says.

He acknowledges that dealers are already recording much lower profitability than in 2004.

Consequently, he says, Renault UK is keeping an open dialogue with the dealer council and network as a whole, and is trying different initiatives and support bonuses to help them.

The tough climate is helping “sort the good from the bad”, says Talou-Derible, but he believes only “a very small number” of his dealers lack the focus to sell successfully. They need to chase leads and drive sales, because lack of showroom traffic means customers aren’t coming to them, but some find it too much of an effort.

He adds: “I’m more concerned about some of our independent dealers. Particularly the people getting close to retirement, that they think it’s too difficult, they’ve just had enough.”

He has plans in place to allocate new franchises in case a dealer terminates his contract, but Talou-Derible says he would like dealers to build on their relationship with the brand.

Franchisees have been “very supportive” of the new three-door Clio, launched last month.

Nevertheless, Renault UK will finish the year flat, with market share maintained at just over 7%. Volumes will be down against 2004’s total of 189,342 units. New car registrations up to the end of October stood at 156,409 units, a fall of almost 6%.

The network is positioned to grow aftersales revenue, having increased the total service bay capacity by 40% in the last three years. Now Talou-Derible has charged dealers with improving service marketing.

Renault has run several initiatives this year to help, such as a service programme for cars outside the three year warranty period and a promotion which gives free roadside assistance cover to drivers who get their cars MoT’d at a Renault dealer.

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