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Does manufacturer dominance threaten the car dealer's brand?

Vehicle manufacturers, particularly in the premium and near-premium market segments, are trying to exert ever more control over their franchised networks in an oft-stated aim of achieving nationwide consistency for consumers. But for some motor retail investors, this could raise concerns of overbearing carmakers putting the franchisee’s own brand differentiation under threat.

As one dealer group chief executive, who asked not to be named, put it: “If they want every dealer to look and feel exactly the same, they should buy out the whole network.”

Yet it is accepted the manufacturer brands are mighty. A consumer poll by Motoring.co.uk asked 468 new car buyers and 832 used car buyers about their awareness of the dealer brand in their purchase process. Almost one in three of the new car buyers said the dealer brand was an important or very important factor in their purchase decision, although an equal proportion said it was not important at all. In contrast, 69% of the respondents said the manufacturer brand was important or very important to them in choosing their new car. The results from used car buyers were similar.

The dealer brand is better reinforced in the aftersales market once the customer has already started a relationship by buying the car. More than 50% of respondents said they would purchase aftersales products and services from the same dealer that sold them the car, and their likelihood of buying from the same site again is stronger if this aftersales relationship is in place.

Terry Hogan, director of Motoring.co.uk, said: “The manufacturer brand is the clear winner in terms of the initial choice, but the role of the dealer should not be underestimated. Dealers with strong brand values and a clear message can support their manufacturer franchise partners while those that deliver a lesser experience will dilute the OEM brand values for a customer.” (Full survey findings)

 

No surprise customers are swayed by manufacturer brand

At the automotive research organisation ICDP, senior researcher Peter Bailey said it is unsurprising that many consumers are swayed mostly by the manufacturer brand given the investments carmakers make globally in winning a prospective buyer’s attention. “While the dealer name is above the door, the whole dealership is generally doused in the manufacturer’s corporate identity which pushes the brand first. But the major groups are still successful in pushing their own brands with heavy marketing,” he said.

Swansway Group director Peter Smyth said he believed most dealers accept that it is the manufacturer brand which draws in the customer. Swansway’s franchises include Audi and Volkswagen, with dealerships branded by the placename, and others such as Honda and Fiat which bear the group’s own name.



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Comments

  • jayashree - 07/03/2015 03:31

    This is same scenario in India, Each Manufacturer needs a signature type Franchisee & competitiion Franchisee is not encouraged. But things will definitely change

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  • Ronnie - 07/03/2015 13:39

    It is not unknown for some manufacturers to deny dealers the right to the dealers name on the dealership fascia Note that reference was made to manufacturers "partners" I have always agreed with the view that if a manufacturer mentions the word partner you hand him a dictionary !!

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