The manufacturer-car dealer relationship in the UK is warming up despite tougher trading conditions, according to the latest dealer attitude survey from the RMI National Franchised Dealers Association, a part of the Retail Motor Industry Federation (RMIF).
The winter survey, published this month, shows that the relationship between dealers and manufacturers is improving.
44% of networks say the value of their franchise has risen, 81% report satisfaction with vehicle supply, 97% say vehicle distribution is good and 50% say their confidence has increased since the last survey.
Overall, UK car dealers believe the value of their franchises has risen. This increasingly close relationship has developed despite a drop in sales, and the detrimental effects of higher interest rates, though some relief came on Thursday with the Bank of England decision to hold at 5.25% for another month.
However, car dealers still have some reservations. Two thirds believe that the marketing stance of their manufacturer has failed to improve retained margins on new cars, while more than half of networks give a downward rating for the effectiveness of their manufacturer’s product advertising.
In line with this, retained margins on new car sales, including bonus and rebates, have fallen for more than four out of five networks and half suggest that this decline is steeper compared to six months ago. However, it is perhaps encouraging that for 11 networks this decline may be slowing slightly, the RMIF unit said.
Sue Robinson, director of the NFDA, said: “It is encouraging that the results of this latest survey seem to suggest that the manufacturer-car dealer relationship may be benefiting from a little more balance.
“At a time when the new car market is at its most competitive, every sale counts and it will be those manufacturers that inspire the most confidence in their networks that will perform best in this difficult climate.”
She added: “I am pleased that manufacturers appear to be consulting more with their dealers and note that showroom standards requirements appear to have been eased for some networks. This bodes well for the coming year, during which there will be many challenges for our sector to overcome.”
