The more formally structured business plans of franchised dealer groups typically demand that they are always at the top of any search engine and can be seen to be the cheapest.

The independent can be more selective as to how they market their offering.

Some franchised operators will turn down a potential purchase due to guidelines within their stock policies or purely down to the fact they practise a manufacturer used car programme that dictates what they retail.

The independent in contrast can view every car on its own merit and judge what it may return through its cycle – initial profit, part-exchange opportunity, referral business, repeat custom and potential service income – even a car they would not normally stock.

Comparing the challenges faced by franchised and independents a disadvantage for one can often be an advantage for the other. When times are good, with plenty of stock and customer demand to match, many franchised dealers have the buying power to move quickly and capitalise on the situation.

Managing overheads

But when business is tough they still have overheads to manage along with investment in the marketing presence expected by the brand name above the door.

There are high expectations from the buying public too, on everything from quality of stock to the number of ex-demonstrators available.

Franchised dealers often ask, privately, ‘who are we actually working for?’.

Customer satisfaction indexes require high levels of investment and time.

There are onerous minimum standards to qualify for used car programmes, demands to meet on minimum numbers of (often heavily depreciating) demonstrators to and high workshop investments in the latest diagnostic tools.

The costs for franchised dealers are astronomical and this can limit their agility.

Independents are not without their overhead costs, of course, and they do not have new car departments to help when a used car month is bad.

But they can be more nimble in changing to suit the times and historically we have seen from our research that independents have tended to be more upbeat about their prospects at any given time than their franchised counterparts.

Some will inevitably fall by the wayside in the current, less heavily supplied, market because they
lack the buying power of the franchised dealer.

The only certainty this year is that independents are going to have it tougher than they have seen for some time.