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Dealer confidence and profitability improving - survey

The scrappage scheme has been acknowledged as the key contributor to an improvement in dealer profitability and confidence in manufacturers' willingness and ability to collaborate during the economic downturn.

The factors have led to suggestions of ‘green shoots’ in the fortunes of the sector.

“The scrappage scheme helped bring welcome relief to car dealers with the vast majority of networks - almost 80% - feeling more confident about their profit margins.

“Dealers also reported an increase in satisfaction surrounding the relationship with their manufacturer despite the economic downturn,' said Sue Robinson, RMI director, on the latest RMI National Franchised Dealers Association Dealer Attitude Survey.

The survey, published this week, shows, she said, “green shoots emerging” partly as a result of the highly successful scrappage scheme.

Key statistics in the NFDA report:

- 75% per cent of dealer networks reported a rise in satisfaction over their profit return, and as a result the dealer average increased significantly from 3.0 to 3.4 out of 5 from the summer 2009 survey.
- 66% of the dealers surveyed reported an improved or sustained partnership with their manufacturer compared to the summer 2009 survey.
- Dealers reported a significant feeling of value for holding a franchise, averaging 7.2 out of a possible 10, up from 6.7 in the summer 2009 survey.

Robinson said: “Most dealer networks have reported improved profitability.

"The scrappage scheme has played a key role in achieving this alongside the work done by franchised dealerships in cutting costs, and streamlining their business operations.

“Unsurprisingly we've found that dealers were happier with manufacturers who have been more willing to collaborate with their dealer networks in setting sales targets and more ready to appreciate the difficulties faced by their networks in the current market.

“At the time of survey there appeared to be a feeling of improved relationships and understanding for most dealers with their manufacturers.

“Despite continued political and economic uncertainty in the coming months the dealers surveyed seem reasonably positive about their businesses in the next six months.”
 

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