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Network Automotive says independents react quicker during recession

Network Automotive believes independent garages have been able to adapt much quicker than franchise dealers to the recession.

The motor industry consultant said that in key areas such as adapting to changing customer needs, losing headcount where necessary and adopting new marketing strategies, independents have led the way.

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Colin Bruder, Network Automotive managing director, said: "Independents tend to be smaller businesses with centralised management, so it is no surprise that they have been able to react to the tougher economic conditions more quickly.

"In contrast, the franchise dealers that we work with are larger with more complex management structures and have the added complication of manufacturer involvement. It takes more time to bring about change."

As an example, Bruder points to one of the emerging trends of the recession - that customers have increasingly wanted to negotiate for the price of work.

He said: "For all kinds of work, customers now want to haggle over the price. If you quote £200 for a service, they might counter with £180 and you arrive at £190 as an agreed figure.

"Independents can handle this kind of thing easily - often the owner is someone who is still very hands on and may even be taking the work booking. For franchise dealers, though, this has been more difficult to deal with. Service managers often have their hands tied by menu pricing and do not have the power to negotiate on price. Some have lost business because of this inflexibility."

Another area of interest is marketing strategies, according to Bruder, where independents have been unafraid to make price cuts and advertise them.

He said: "Most independents have traditionally pitched themselves as a low cost alternative to a franchise dealer, so leading on price is something that comes naturally to them. For franchise dealers, especially those who are the most concerned about brand equity, even talking about costs is something they have discouraged in the past - but most of them have had to change rapidly."

However, Bruder added that, with the recession now a year old, most franchise dealers were beginning to catch up with and some even to pass independents in their responses to the recession.

He said: "What we are now seeing is a culture change among franchise dealers. Many have become more nimble and flexible while manufacturers have adapted their marketing strategies to deal with customer demands over pricing.

"Together with the strong used car market, some have actually had reasonably profitable Q1 and Q2 results which, considering the woes of the economy, is a testament to the underlying strength of their businesses."

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