The German car dealer and service industry is facing “strategic changes of dramatic dimensions,” says a study commissioned by an unnamed car maker and conducted by Booz Allen Hamilton consultants, Automotive News Europe said. The study covered 405 car dealers and 50 service workshops.

According to those surveyed, 29% of new-car dealers are preparing to become multi-brand retailers. Some 35% also said they aim to use the opportunities that the new block exemption provides to expand their aftersales business. VW group and Opel dealers are the driving forces, the study said.

“The results of the study reflect the fact that many car dealers are deeply dissatisfied and that their loyalty towards their main brands is declining,” said Steffen Schick, a Booz Allen Hamilton executive responsible for surveying the automotive industry.

Decreasing profits, OEMs’ demanding expectations and slow sales at dealers have resulted in an increasing number of companies looking for new opportunities to increase the utilisation of their workshop capacities, increase sales and reduce risk.

When asked about multi-brand sales, 31% of dealers expect an increase in their return on investment of more than 1% and 23% expect a rise of at least 0.5%.

Only 13% of those questioned believe that multi-brand sales will reduce costs. Companies see more saving potential in the workshop area. Smaller Audi dealers, for example, hope that additional service contracts will increase use of the workshops.

“The importance of multi-branding will increase significantly within the next five years,” said Booz Allen partner Hans-Bernhard Port.

In the future, 30 to 40% of dealers will be selling more than one brand and 40 to 50% of service workshops will be authorised by more than one OEM, the study indicates.

Port believes that with the elimination of the location clause by 2005, the changes will become more dynamic.

A small consolation for the manufacturers: Most multi-brand dealers want to sell brands from a single car group.