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Mixed reaction over pay guide results

Dealers and manufacturers have given mixed reviews to the results of an industry pay guide.

While some franchised dealers have challenged the findings and fear they might lead to requests for higher salaries in an already heavily-depressed motor retail sector, others feel they give a useful reflection of the levels of pay on offer in the businesses.

And while pay cuts are widely expected in 2009, some dealers actually plan to reward their staff better in order to boost morale and motivation.

The RTS Auto Retail Industry Salary Survey 2009 has prompted headlines that BMW dealer principals typically earn £98,715 a year. That was based on a sample size of 22 sales points.

However, a senior BMW dealer source insisted that figure was “over-exaggerated” by about £10,000 across the national average. 

Vauxhall DPs well paid

Nevertheless, dealer principals are better paid at
BMW outlets than all their counterparts. 

Generally speaking, premium franchises paid more highly than volume brands, although Vauxhall dealer principals are an exception – they are third highest paid on £71,084.

The survey, conducted by Trend Tracker, found that Fiat and Alfa Romeo dealer principals were the lowest paid in the UK, with the 36 sample outlets paying £48,437 a year on average.
A Fiat dealer said the figure was “way too low”.

Citroën’s wage figures were also “way out”, according to a dealer source, but in this case they were too high. 

But some dealers said figures given for their franchises were fair. Paul Brayley, Brayley Honda managing director, who owns three Honda sites, said the figures were about right – dealer principals average £66,942.

Pay reviews

He will review staff pay next month, but to maintain morale he will not make cuts – except to his own salary. 

Brayley said: “I think some will get a pay rise. In every business you get different circumstances but there is no set plan.”

Jaguar’s £78,154 figure was “not a good representation,” said one dealer, who was concerned that it was based on a sample of only 14 outlets.

He had no plans to cut wages next year as he felt it was important to reward “good people for doing a good job” although on balance he was not going to increase pay either and was not prepared to take a pay cut himself.

This highlights another point in the Trend Tracker survey which states that 25% of franchised dealers did not increase basic pay for their staff between 2007 and 2008.

Ford, Volkswagen and Audi retailers told AM they were implementing pay freezes to control costs, while pay might reflect reduced targets. 

The survey was compiled by Trend Tracker from an online questionnaire and email surveys from industry bodies and companies. 

An originally stated sample size of 121 outlets and nine dealer groups was described as “misleading” by report author Chris Oakham, of Trend Tracker.

Cost cutting

He said the figures were actually based on a sample size of 546 dealerships across the last two years, calculated using a two-year moving average.

“Clearly franchise is only one of many determinants of wages and salaries,” said Oakham. 

“An average is the best of the worst and the worst of the best, so if you go to individual dealers, there’s bound to be some positions that are paid a lot more and also a lot less. I believe the figures are robust.”

Oakham added: “Don’t forget that 70% of dealer’s gross profits are spent on wages, so cost-cutting has to start there. 

“Pay packages can also fall in reality because high staff turnover means dealers can reduce pay for the next employee.”

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