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BMW dealers' confidence sinks to all-time low

BMW dealers’ confidence is at its lowest for nearly 20 years, according to a new survey, despite growing group profits.

The franchise performs badly in most areas of the new Dealer Attitude Survey produced by the Retail Motor Industry Federation. Its dealers are concerned about most areas of their business, reporting their lowest ever scores for marketing, profit potential, vehicle supply and distribution and manufacturer requirements, and the franchise comes bottom in marketing stance, profit potential and future profit potential, suggesting that dealers do not foresee improvements in the coming year.

'Dealers report a winter of discontent at Britain's biggest prestige marque,' says Sue Robinson, the RMI’s national franchised dealers association director. 'Despite sales in 2005 up by more than five per cent on the previous year, BMW dealers are clearly worried, with their confidence at its lowest ebb since the survey began 17 years ago.'

At the other end of the spectrum, Hyundai dealers are also lacking in confidence after a year that saw new registrations for the marque fall by almost three per cent. They return downward ratings in most tracked categories compared to the last survey six months ago.

Robinson said: 'It is not all bad news. There is evidence that Chevrolet has been listening to its dealer network, with retailers' confidence in their franchise making rapid strides since the last survey. Just six months ago these dealers placed their franchise second from bottom in the all dealer index for value of franchise, but it seems things are looking up.

‘The latest survey sees them move up nine places to 22nd in the index and dealers also report improvements in their manufacturer's marketing stance, parts and vehicle distribution, and requirements. They are also more positive about the level of control they expect Chevrolet to impose on their businesses in the future.'

Perhaps the biggest success story is Land Rover, which this winter makes a surprise entry at number two in the all dealer index for value of franchise, moving up five places since the summer.

Land Rover dealers demonstrate confidence in their franchise throughout, returning positive ratings in most categories and performing best of all franchises in profit potential and retained margins. Indeed, Land Rover dealers are the only network to show confidence in their retained margins.

Robinson said: 'Nothing it seems, however, can knock Lexus from its top spot: these dealers remain the most confident in profit potential and incentive programmes, and the franchise, which in 2005 recorded its sixth successive year of growth with sales up by nearly six per cent, retains its number one position for value for the sixth survey in a row.'

  • Check out this comment on Hyunudai's performance from the AM Dealerforum:

    "It comes as no surprise that Hyundai have absolutely bombed in the Value of Franchise/Overall Rating for the Winter 05/06 survey - from joint 12th in the Summer 05 survey to 25th (out of 31 franchises). Just two winters ago, Hyundai were a lofty 7th!

    Couple these results with the £688 average loss per dealer in the January 2006 composites and things aren't looking too good."

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