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NFDA survey results show relations between carmakers and franchised dealers are not improving

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The UK’s car brands have failed to improve their relationships with their franchised dealers over the past six months, according to the NFDA Winter 2016 Dealer Attitude Survey, published today.

“The relationship between car dealers and car manufacturers recorded an average score of 6.1 - 0.1 points lower than the summer 2015 survey. This is the lowest score recorded in the past 8 surveys, suggesting that a number of dealer networks are slightly less satisfied with their relationship with their manufacturer,” said Sue Robinson, director of the National Franchised Dealers Association.

The NFDA received one of the highest overall response rates it has ever seen for the latest survey – 39% of all franchisees across 28 networks took part.

Robinson added: “Of particular concern are the results for questions that involve new car targets and pressure to register vehicles. Answers to these questions showed that even in an extremely strong UK car market, some manufacturers are still pushing registration growth at the expense of dealer margin.”

The survey shows a slight decline in dealer satisfaction with their manufacturers on the all-important question about the overall value of the franchise.

  • The score is down 0.1 points since the summer 2015 survey and down 0.4 points on the survey this time last year. 17 franchises scored above the average, and 11 below average.
  • Mercedes, Lexus, Suzuki and Kia were recorded as the top 4 franchises.
  • The least valued franchises by respondents were Jaguar, Volkswagen, Peugeot, Renault and Seat.

Dealers returned an average score of 4.8 when asked how satisfied they were with their new car targeting process. Although the score was up 0.1 on the last survey, it still indicated that in general dealers were dissatisfied with the targeting process with their manufacturers.

  • Mercedes remained as the top scoring franchise with a score of 8.0 – but was still down 0.6 on the summer survey, followed by Lexus, Kia and Suzuki.
  • Renault, Vauxhall, Fiat and Jaguar had the lowest scores for this question.

Profit and profitability ratings also saw a decline. The results suggest that dealers are less optimistic about future profit returns than they were previously.

  • When rating the profit return by representing their franchise, an average score of 5.4 was recorded. This score is down 0.2 points since the summer survey, and 0.6 points lower than last winter.
  • When asked about the future profitability of their business the all dealer average declined from 6.0 to 5.8

When dealers were asked ‘how satisfied are you that your manufacturer dealer standards are fair and reasonable’, the average score for the winter 2016 survey was 6.1. This score was down 0.3 points from the summer survey and 0.4 points since last winter.

Once again Mercedes received the highest score at 9.1 – up 0.2 on the previous survey and signifying near complete satisfaction with standards.
Volkswagen had the lowest score down to 3.2 from their summer survey score of 5.2.

"The results for this question has been in repeated decline since summer 2014 and the trend is of concern suggesting manufacturers are continually raising standards that are seen be dealers as uneconomic or unreasonable," said the NFDA.

Robinson concluded, “There are a number of franchises that appear to have scored above average for most questions, and appear to have maintained a strong relationship with their dealer networks. These include top scoring brands Mercedes, Lexus and Suzuki - who out-performed most brands in the all-important questions.”

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