7:34 am, December 11, 2008
DEALERS should renegotiate their relationship with their franchised manufacturer, to fight the recession.
This, advises consultancy Network Automotive, will help both fight tough economic times.
Both must accept the reality of less financial commitment from one another – but they must also both become more flexible and work together more closely.
MD Colin Bruder said: ‘The recession means that there is simply less money in the pot for both manufacturers and dealers, and this will undoubtedly affect their relationships.
This will impact on dealers, who ‘may no longer be able to afford to follow the type of stringent standards specified by manufacturers in recent years, especially where this requires considerable investment.
In turn, dealers should not expect ‘the kind of marketing support seen in recent years. Special offers, involving finance, for example, are already becoming rarer.’
It is a back to basics approach that will serve both best. Bruder outlined what it will mean for each:
• Manufacturers? ‘This may be as simple as ensuring that vehicles currently in high demand are readily available to dealers, to maximise opportunities for new car sales.’
• Dealers? ‘It may be a renewed concentration on customer service, to ensure that as much loyalty to the manufacturer is achieved as possible. Or, reducing administration, by ensuring that warranty claims are right first time.’
He also recommends further potential profit streams. Dealers and manufacturers should look at ‘ the more recession resistant areas of the market – such as Motability, public sector tendering, tax free sales, driving schools and dealer rental.’
Car dealers and franchise manufacturers should see the recession as an opportunity, though. ‘One of the positive things about tough times is that they bring people together, and this is already starting to be seen in manufacturer and dealer relationships.
‘We are starting to encounter a spirit of co-operation, where each party tries to help the other, rather than the ‘us and them’ attitude that has sometimes characterised these relationships.’
