Manufacturers will turn the screw on their dealers

Showrooms are closing around the country and manufacturers are looking to shrink their dealer network to protect profitability, but also ensure the dealers who represent them are expanding on growth and customer care. The majority of car makers are committed to ambitious customer satisfaction programmes and although during the downturn some of the criteria for bonus qualification has been relaxed, in the long term dealers who do not comply with structured KPI’s (key performance indicators) around performance will find that not only are they in danger of losing out on extra income, but also suffer the real threat of termination notices. This will be the harsh reality for the car business in future and in order for the continued survival of car sales all those involved, from across the spectrum, will need to raise their game to compete. The number of franchised dealer showrooms to have closed in the last decade is well over 1,000 and during this recession that figure could easily double. With fewer dealer groups operating more franchises the days of the sponsored dealer could well be at an end.

Most of the top brands in the country have partnerships with dealer groups as they are more likely to have the funds, and indeed the appetite, to invest in showroom standards and refurbishments. This, for the customer, should ultimately be a benefit and although some may miss the comfort of the long term relationship with their local centre, they should benefit in terms of improved service and greater accountability which comes from dealing with larger groups who have a bigger reputation to protect!

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One Response to Manufacturers will turn the screw on their dealers

  1. arizonaray January 10, 2010 at 11:31 pm #

    If dealerships truly are closing around the country, do you think that the online buying trend will take off more now?

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