UK dealers are coming under pressure from vehicle manufacturers seeking to achieve higher vertical integration ‘by stealth’ according to as senior figure at the Retail Motor Industry Federation (RMI) – a body that represents dealers.
‘There is strong evidence to suggest that several vehicle manufacturers are working to achieve a significant level of vertical integration of dealer networks through stealth. Dealers are being “encouraged” to either sell their sites or sign pre-emption agreements giving first right of purchase of their sites to the franchisor,’ said Alan Pulham, the RMI’s Franchised Dealer Director, speaking on behalf of the RMI’s National Franchised Dealers Association members.
He continued: ‘Either option places the dealer at a significant disadvantage in the relationship between “so-called” partners. Dealers are calling for more transparency and honesty in vehicle manufacturers’ strategy on franchising for the future.’
He added: ‘We are currently working hard to improve dealer rights under the next Block Exemption Regulation, and it is vital that dealers avoid entering into separate agreements that could negate any future gains. The offer to make a 1 per cent investment in a dealer’s business is no compensation for what could prove to be loss of control.”