BMW’s UK unit is threatening to fire up to a fifth of its dealers, accusing them of being “complacent” and not up to BMW’s standards, according to the Daily Telegraph newspaper.

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However, the Retail Motor Industry Federation, which represents car dealers, reportedly said the criticism from BMW (GB) managing director Jim O’Donnell was “offensive” and advised dealers to ignore his comments.


The Telegraph said O’Donnell introduced a points system, with yellow and red cards, for BMW’s British dealers last year to raise standards before their five-year contracts with the German firm expire in 2008. He reportedly confirmed that he had written to 30 of its 160 dealers which were failing to invest in their premises or staff, despite a big jump in UK sales of new BMWs from 67,000 in 2000 to 102,000 cars last year.


The paper said O’Donnell has claimed that the company could have made 25% more sales with a better dealer network. He reportedly said: “Maybe some of them don’t have the hunger and complacency has crept in. We will work with them in the interim. Eighty per cent are fine and are coping with the increase in sales, but 20% are not investing.”


According to the Daily Telegraph, car dealers typically invest £4 million to £5 million in their showrooms over seven years. O’Donnell reportedly said that he had fired at least 50 dealers since he took over the BMW UK network in 1990 – any dealers which were going to lose their franchises would be notified in 2007 to allow them time to sell their businesses.

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The franchised dealer director of the Retail Motor Industry Federation, lan Pulham, told the paper the comments by O’Donnell were “offensive, downright offensive”.