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Dealer survey reveals growing unease of manufacturer strategy

Franchised car dealers are looking to motor manufactures for more support as market conditions remain tough in the post-scrappage period, according to the newly-released RMI Franchised Dealer Attitude survey.

The results show tough market conditions are taking their toll on car dealers.

It also suggests said RMI director Sue Robinson: "There is unease amongst dealers about future manufacturer strategy, forcing a new round of high investment and standards for their businesses."

A decline in sales, largely attributed to the end of the scrappage scheme hasn’t affected the desire to maintain market share and some dealer zone staff are demanding high targets to achieve this.

"However,a decline in the value of sterling is causing some manufacturers to switch vehicles to other markets, causing some supply difficulties for UK dealers, which had made reaching the targets more challenging.

The tough economic climate, coupled with tax rises, threat of unemployment and Government cuts further impacting consumer confidence, is reflected in the fact that 57% of those dealers surveyed provided a reduced score in “profit return” since the last survey.

In spite of the challenging market, dealers were confident in their product image, value and pricing and, Robinson said that, "encouragingly, the majority of franchises have either increased their rating or remained static since the last survey".

This is also reflected in the fact that there was a 50/50 split of networks scoring on or above the 3.7 average mark and those who scored below it.

Last year most dealerships performed well in terms of profit but 2010 has been a difficult year.

A change of Government, rises in taxation, the threat of unemployment and spending cuts from the new Government have impacted on consumer confidence, and in turn dealers potential performance.

This has led to a slight decline to the all dealer average confidence of -0.1 from 3.5 to 3.4 in the survey point system.

This, together with the 54% of networks reporting a decrease in rating, shows a degree of concern over future dealer profitability amongst networks.

On a more positive note, the average scores for “introduction of new models” and “dealer training” were high, at 3.8 out of five, showing widespread satisfaction across the dealer groups.

Read about the full survey findings in the next issue of AM magazine, which is out on September 24. 
 

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