UK car dealer costs resulting from manufacturer-imposed franchise requirements are falling, according to a new survey by the RMI’s National Franchised Dealers Association (NFDA).
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The NFDA Dealer Standards Survey 2007 looked at the impact of manufacturer standards on dealers and showed that the majority of dealers are spending less to meet the requirements than last year – 39% of dealers spent more than GBP50,000 implementing franchise standards, a 10% drop on 2006.
The level of objection is also falling – 63% of dealers believe that their manufacturer’s dealer standards are excessive, 27% down on 2006. And 62% of dealers say manufacturer standards demands have increased in the last year, a drop of 29% on 2006.
Some of the most common franchise requirements in 2007 have been: staff training 76% of dealers, new diagnostic equipment (61%) and tools (62%).
The acceptance is not total though. The survey found that 45% of dealers have considered selling up due to increasing standards demands from manufacturers, 7% up on 2006.
NFDA director Sue Robinson said: “Dealers are under pressure to meet targets at all times, but not all are about sales. Manufacturer standards requirements impose a particular pressure, not least because they can sometimes appear to have no real benefit for your business. This is where dissatisfaction arises.
“This year, manufacturers are requiring dealers to invest in training, equipment, and tooling, all of which dealers will see as vital to their business. Manufacturers do appear to have lessened their requirements for spending on visual presentation, which some dealers see as having no discernable benefit.
“The increasingly good relationship between dealers and manufacturers, as logged in successive NFDA Dealer Attitude Surveys, means that the ongoing dialogue between the two parties has helped the situation.”
