The Retail Automotive Alliance, a not-for-profit company created by franchised car dealers, is expecting a rush of applications for membership as the scrappage hangover forces more dealers to address their costs.
However, the new RAA chairman, David Bussey, told AM that the allianc, which saves its members millions of pounds annually through group buying deals, will only accept members who meet its strict membership criteria.
“We will expand further. We have not set a cap on membership,” said Bussey in an exclusive interview.
“But we haven’t got huge growth aspirations. We are careful who joins. We have critical mass already so we can be selective…We have turned down applications already and will carefully assess all applications, we will do what’s right for the RAA and protect our interests.”
Despite this, he has little doubt that membership will continue to grow – two more groups joined the alliance at its last meeting - as more dealers, both independent and franchise, come knocking on his door attracted by an alliance that last year saved its members in excess of £6.5 million.
The RAA, which currently has 24 members all of which are franchised dealers, has supplier deals covering everything from bodyshop paint, tyres and oil right through to trade insurance. It also has deals with major suppliers like Manheim, Autotrader and Experian.
“These might be quite unglamorous but they cost each dealership quite a bit of money.”
These suppliers get guaranteed volumes while members benefit from advantageous rates. It is a win-win formula that will attract more dealers. But these will need to put more into the alliance than just the annual membership fee to access the savings.
“We are looking for a group of likeminded, proactive people who are going to participate both in the deals and the development of new deals – we don’t want those who are just going to come along for the ride,” says Bussey.
“We feel that we can be selective, we have proven that we have an organisation that works and we know that we can offer people who join a significant benefit, but we want something back for that.”
Smaller dealer groups are unlikely to get into this exclusive club – typical annual turnover of the current membership is between £60m and £120m.