The latest survey of dealers’ relationships with manufacturers by the RMI's National Franchised Dealers Association (NFDA) shows a considerable hardening of attitudes.

The main factors in the NFDA’s summer Dealer Attitude Survey suggest that, combined with tougher economic conditions, dealers are finding their relationship with manufacturers challenging, said Sue Robinson, NFDA director.

Responses in the survey, which received the highest response from dealers for more than 20 years, to the key question ‘how do you rate the value of holding your franchise’, put Land Rover, BMW, Lexus, Audi and Nissan as the top five franchises.

Land Rover beat Lexus to the top spot in the rankings, leaving them in joint second place with BMW.

The least valued franchises by respondents are Proton, Fiat, Mazda, Renault, Honda and Seat.

“With the economic climate and market conditions still challenging, dealer profitability is of clear concern to the majority of networks, with a decrease to the all dealer average of -0.2 from 3.2 to 3.0,” said Robinson.

“2011 has seen margins and company profits decline across many franchises. With the difficulties in the retail market, there appears to be uncertainty amongst dealers about future profitability.

“The UK economic outlook is uncertain with further years of slow growth forecast and poor consumer demand possible.”

The majority of dealer networks surveyed are dissatisfied with the standards their manufacturer sets them.

62% of networks responded with a decrease in score, particularly Mazda -0.7 and Audi -0.4, with both falling below the all-dealer average mark.

Dealer standards also appear to be an issue for Ford, Jaguar, Renault, Vauxhall and Volvo, all giving a downward rating of -0.4 and Lexus and Peugeot who fall by -0.3.

Lexus, however, is in joint first position in the rankings table for standards their manufacturer set them, despite this decrease in rating.

The Nissan dealer network shows a significant increase of +0.6. Land Rover’s is also more satisfied with dealer standards having recorded an increase in score of +0.3, as is the case for Suzuki with +0.3.

Partnerships with manufacturers appear to have deteriorated amongst some networks.

When asked to score their manufacturer based on the partnership they have with them, 52% of networks scored their manufacturer lower than they did on the last survey.

This is also proven by a drop in the all dealer average of -0.1 from 3.7 to 3.6.

“Dealers are obviously feeling that their relationship with their manufacturer is less of a partnership,” said Robinson.

“There are higher manufacturer demands, particularly with targets and standards. Dealers are feeling that their manufacturers are imposing standards but are not taking into account the dealers’ position, particularly in a tough market with reducing margins.”

The NFDA survey is carried out twice-yearly and examines how dealers view the major issues currently affecting them, while also evaluating how these views are changing over time. It also offers franchised dealers and manufacturers an idea of the balance of opinion held on a range of views within their networks.

Dealers were asked to respond to questions covering significant aspects of their business relationship with their manufacturer. From these responses scores have been produced on a simple five point scale, running from 1 - very dissatisfied/very poor to 5 - very satisfied/very good (question 21 is rated from 1 - very poor to 10 - excellent).

• Chrysler Jeep and Dodge were removed from the survey due to low response rates and Chevrolet and Proton results were based on small sample sizes.
• To view the NFDA report click here.

 

How do you rate the value of holding your franchise?