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Retail groups form major alliance

Twenty private dealer groups with a £2.1bn combined turnover have formed a joint venture called Retail Automotive Alliance Ltd to increase their buying power and gain greater protection from block exemption changes.

The collective, which has been a year in the making, has a total of 155 dealerships.

Of these, 106 are Ford outlets, representing 85% of total turnover, with the remainder being Citroen, Fiat, Honda, Iveco, Kia, Mazda, Mitsubishi, Peugeot, Rover, Seat, Skoda, Subaru and Toyota sites. Its turnover would notionally put it second in the AM100, between Pendragon and Reg Vardy.

The 20 companies are equal shareholders with an initial investment of £500,000 each, and they retain full individual control of their own businesses. The RMI has welcomed the move, and says it could serve as a model for small private dealer groups with other franchises to work together.

Philip Maskell, managing director of Essex Ford Group and a former Ford national dealer council chairman, is the RAA’s inaugural chairman, and Paul Knight, former Ford of Britain finance director, has been appointed chief executive.

“We’re not just sitting on our hands waiting to be rolled over by the large dealer groups. This is a display of private groups showing dynamic initiative,” says Maskell.

“We will ultimately become more competitive with the large groups by seeking equivalent economies of scale but have unmatchable regional and brand focus – particularly as we face the challenges post October 2005 with the abolition of the location clause.”

The RAA is seeking a “win-win” relationship with carmakers, and Maskell suggests this is the best chance for Ford to retain its network stability.

“Collaborating to buy vehicles from Ford is not what this is about but we do want to save money by purchasing everything else, such as consumables and utilities,” he says.

“There can be benefits to suppliers, too. RAA buys half its lubricants from Castrol BP and I’m sure the oil company would be interested in supplying the other 50%. It may take us as long as a year to work out how large the savings could be, and that’s what Paul Knight, as chief executive, will be working on with us.

“It won’t necessarily require all RAA members to be part of every initiative.”

Matthew Carrington, RMI chief executive, believes the alliance will provide real benefits to the consumer. He hopes carmakers will see it as a positive step. “We wish it great success,” he adds. At Ford of Britain, dealer operations director Yaser Shabsogh says: “This is an independent dealer initiative which we note with interest and which we hope will translate into an even better level of satisfaction for Ford customers.”

Combined annual turnover totals £2.1bn, placing the new Alliance at No 2 in the AM 100 dealer listings.

Individual members’ turnover

Patterson Ford £190m
Hendy Ford £185m
Peoples Ford £183m
TC Harrison £175m
Brooklyn Motors £160m
GK Group £137m
Day’s of Swansea £135m
Vospers £119m
Sandicliffe £110m
Lifestyle Ford £105m
Essex Ford £103m
Furrows £97m
Gates Ford £91m
EMG £87m
Gordons Ford £65m
Busseys £60m
Sky Ford £50m
Skipton Ford £40m
OMC Ford £30m
Dunfermline Autocentre £12m

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