MPs are to be tackled today on the dangers posed to dealers by rising costs and falling profits, largely as a result of manufacturer pressure.

Matthew Carrington, Retail Motor Industry Federation chief executive, Keith Sayfritz, RMI president, and Sue Robinson are to hold a series of meetings with senior MPs at the Labour Party Conference today to discuss the increasingly costs and legislative pressures being imposed on franchisees.

'Rising costs across all elements of their businesses are hitting dealers hard,' Robinson said.

According to her, costs associated with VAT, regulation such as the new FSA rules on insurance, employment, health and safety and environmental obligations continue to increase, while profitability from selling new cars is falling.

Robinson said: “Dealers are being targeted from every angle and the recent rise in the London congestion charge is just one example of increased overheads that will add hundreds of thousands of pounds to retailers' cost bases this year.

“The situation is compounded by vehicle manufacturers' ever increasing investment requirements, as our members highlighted in the recent NFDA Dealer Attitude Survey. Manufacturers need to be mindful that their dealer partners' finances can only be stretched so far before business performance is affected.”

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