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NFDA sets out BER wish list

The National Franchised Dealers Association (NFDA) has laid out its wish list for the next Block Exemption Regulation review in 2010.

The trade body, part of the RMIF, is keen to retain the two-year notice of termination as it provides a degree of security for its members. But it is pressing the European Commission to abolish the one-year notice of network restructuring in favour of a two-year agreement. And it wants carmakers’ franchise requirements to be “more affordable and reasonable”.

Alistair Manson, head of NFDA, acknowledges moves made by Honda and BMW, among others, to address the administrative costs placed on their retail networks, but he wants all manufacturers to do more to reduce the pressure on franchised dealers.

Figures show that UK dealers suffer from lower margins than any other country in Europe, although the NFDA points out that this does not mean they are necessarily less profitable.

UK margins average 13.8%, divided between base margin at 7.4%, quantitative bonus at 2.5% and qualitative bonus at 3.9%. And dealers face the highest standards.

“Carmakers need to be more reasonable on their demands, including on the implementation of franchise terms,” Manson says.

The NFDA will continue to lobby for retailers’ rights to display their own names on showroom signage – the likes of Audi, Lexus and Mercedes-Benz require dealers to trade under their name only. It also wants mutual agreement on sales targets.

“Targets are agreed at the start of the year but there are changes made by the manufacturer during the year,” says Manson. “These should be agreed with dealers each quarter.”

One of the changes praised by the NFDA under the last Block Exemption in 2002 was the right for dealers to buy any rival company as long as it held that franchise. NFDA wants this extended to include any business.

“There should be greater freedom for dealers to sell their businesses to anyone, whether they hold the franchise or not,” Manson adds.

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