AM Online

Business harmony needed between carmakers and dealers

Car manufacturers and dealers must work more closely together than ever before if they are to sell more cars.

With almost a fifth of annual UK new car registrations expected in March, the motor industry will be awaiting some positive sales news following a steady fall in the market since April 2004.

A new report, called ‘The Great Minds Think Alike’ by business advisory firm Deloitte, examines how an improved bond between manufacturers and retailers will have a positive impact on sales.

It draws on car purchasing experiences worldwide to outline five practical principles on how manufacturers and car dealerships can understand each others objectives and build closer, mutually beneficial relationships.

David Raistrick, European automotive partner at Deloitte, said: "There’s no doubt that the UK car buying public is better educated today than ever before, thanks to the impact of the internet and significant growth in auto-related television programmes and magazines.

"However, until dealers fully appreciate the carmakers’ aspirations and vice versa, the customer is never going to get a seamless ‘limousine service’ when buying a car."

The five principles identified by Deloitte are:

1. Find common ground to create truly productive collaboration;

2. Be your brand. Every day, in every country and at every customer touch-point;

3. Create a better customer experience;

4. Execute the right marketing campaigns – closely guided by the dealers;

5. Measure the effectiveness of your actions. Again and again.

Raistrick said: “Many dealers recognise the need to create a new ‘unique buying experience’ in their dealerships if they are to ensure the customer comes to their business and not another. Manufacturers, on the other hand, must take the time to nurture relationships with their dealers, particularly as the customer experience starts and ends there.”

Jane Lodge, UK manufacturing industry leader at Deloitte, said: "Manufacturers face a growing challenge from both auto makers in emerging markets and significant rising vehicle production costs. The vast gulf between the 65 million vehicles manufactured globally in 2005 and the 55 million cars sold hits both the car makers and the retailers in the pocket, leading to falling profits for each group.

"Any indifference between auto maker and retailer will influence the car buying public, leaving a lasting impression which may have a negative impact on the brand in the longer term. Only a harmonious relationship founded on recognition of the manufacturers’ ambitions and the retailers’ goals will garner the greatest rewards - new car sales."

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