Sue Robinson, director of the National Franchised Dealers Association, has written to her counterpart Paul Everitt, chief executive at the Society of Motor Manufacturers and Traders, to address issues she feels will benefit both retailers and carmakers during the economic downturn.
Details of the letter are confidential, although Robinson hopes Everitt will circulate it to his manufacturer members.
“Following our NFDA executive we felt dealers and manufacturers could work better in partnership on a practical level – for example, looking at targets in this difficult climate,” Robinson told AM. “We are addressing the key issues.”
The Retail Motor Industry Federation (RMIF) and SMMT have held meetings with the Department for Business, Enterprise and Regulatory Reform and the Department for Transport to discuss ways in which the Government could revive consumer confidence.
The RMIF is calling for lower interest rates; additional finance for the banking sector to boost lending; banks/building societies to use repossession of property as a last resort; lower taxes in the short term to raise disposable income; and measures to cut household costs.
Resilience in difficult times
Robinson, inundated with calls from national newspapers looking for an angle on dealership closures and redundancies, said dealers are very resilient and are shifting their emphasis to used cars, service and repair to make up shortfalls in their new car operations.
“Plenty of dealers were around in the ’90s and ’80s and can remember previous recessions – they are pulling out all the stops,” she said.
Dealers contacted by AM are calling for a combination of Government action and greater carmaker support.
Paul Piert, managing director at Ribble Valley Motors in Blackburn, said: “I would like the Government to lower the road tax on some cars. It has spiralled out of control. People aren’t buying cars because of these costs.”
Russell Wythe, dealer principal at Wrights Mazda in Norwich, believes it’s all about cashflow with exorbitant cash charges.
“The Government could help with bank-based low interest deals so they could be approached for some funds to liquidate the cars on the forecourt,” he said. “It would get things moving in the trade.”
Assistance in training
John Dingle, managing director of Attleborough-based Dingles, wants corporation tax to be more in line with VAT at 17.5%. He’d also like assistance in training, with incentives to help increase the number of young apprentices, and is calling on the Government to review paternity leave.
“The costs of that will be enormous for a company like mine where 85% of the workforce is male,” he said. Posts on the AM Forum – www.am-online.com/forum – were less positive about Government action.
One said: “The only way the situation is going to be improved is either the economy improves as it did in the ’90s, or the Government puts substantial incentives in place for scrappage –which equals higher borrowing (unlikely) or taxation (unpopular).
“What we need is a stable and growing economy and a business model from manufacturers that gives a better return than the 1% average return now.”