AM Online

Franchised new car sales points in decline

The number of franchised new car sales points is in decline, with the closure of 283 outlets in 2005 reducing the current total to 5,644 sites.

Analysis by Sewells Information and Research blames the collapse of the MG Rover franchise for much of the drop, the steepest fall in 10 years and a downturn after a slight increase in 2004.

In total, 18 vehicle manufacturers reported contracting networks, including Peugeot (11 fewer), Hyundai (down nine), Alfa Romeo, Volkswagen and Vauxhall (all down eight) and Suzuki (seven fewer).

Network expansion was achieved by Renault (up 20), Subaru and Mazda (six more) and Mini, Kia, Ford and Chevrolet (all up five).

Of the 5,644 franchised sites, 3,452 are operated by dealer groups with two or more dealerships.

Of these, 990 sites belong to the top 20 groups in the AM100. Sewells’ research also shows that many car manufacturers are steadily increasing the proportion of their franchised network that is operated by dealer groups, as opposed to owner-drivers. In the cases of Kia and Hyundai, these increased from 39.2% to 64.9% and 32.5% to 51% respectively.

“Although the number of UK franchised new car sales outlets is at its lowest level since records began in the early 1970s, a number of vehicle manufacturers are optimistic about increasing the size of their networks to build on gains made in 2004, which could result in the number of franchised outlets exceeding 5,800 by the end of 2006,” adds the report.

Despite 2005’s tough new car market, the average sales per outlet increased by seven to 529, the second highest in 10 years (in 2002 the average was 535) caused by the contracting franchised networks counterbalancing the decline in registrations. But broken down into individual franchises, the research shows that Fiat and Renault dealers had a tough year, with averages dropping 216 and 136 units respectively. Conversely, Mercedes-Benz increased its average sale per outlet by 167 units.

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