AM Online

The Big Picture: Who’s really in control?

Senior executives at a number of manufacturers are now starting to take closer stock at what happens in their retail networks and how audits and stringent operational standards are having a negative impact on sales and customer service.

BMW and Honda started assessments last year; now Ford is looking at simplifying its relationship with retailers.

The reviews follow complaints by retailers across many franchises that, while carmaker chief executives talk about having profitable networks and strong dealers, middle management is really in control – and they are focused on creating the best looking showrooms and driving down cost by withholding bonuses under the pretence of non-conformities.

AM has regularly reported on the outrageous demands made by manufacturers and has been pushing for better recognition about the pressures faced by retailers.

One retail boss told AM: “Top management don’t know what is going on in the network. They talk about needing a strong dealer network but it’s the middle management who runs the show.”

Retailers are becoming critical of their dealer council chairman, believing do not want to tackle the big issues in fear of being seen as troublemakers. Others claim that only dealer bosses who are seen as friendly towards the carmaker are allowed to be appointed as council chairman.

Adding to operational complexities is the never-ending franchise investment programmes. A recent RMIF survey revealed that dealers were expecting to spend on average almost £175,000 on showroom upgrades this year, although this figure could be skewed by some million-pound investments made by a couple of larger groups.

At a time when new car sales are falling and network margins are under pressure, asking dealers to spend more money sums up perfectly the blinkered control of middle management.

AM would like to hear from you: how much do you expect to invest this year? Go to our forum at www.am-online.com/forum to have your say.



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