Car dealer costs down, manufactuer relations improved

Car dealer costs resulting from manufacturer-imposed franchise requirements are falling, according to a new survey from the RMI’s National Franchised Dealers Association (NFDA).

The NFDA Dealer Standards Survey 2007 looked at the impact of manufacturer standards on dealers. The survey shows that the majority of dealers are spending less to meet the requirements than last year:

39 per cent of dealers spent more than £50,000 implementing franchise standards, a 10 per cent drop on 2006.

Also, the level of objection is falling:

63 per cent of dealers believe that their manufacturer’s dealer standards are excessive, 27 per cent down on 2006.

62 per cent of dealers say manufacturer standards demands have increased in the last year, a drop of 29 per cent on 2006.

Some of the most common franchise requirements in 2007 have been:

Staff training 76 per cent of dealers
New diagnostic equipment 61 per cent of dealers
Tools 62 per cent of dealers

The acceptance is not total though. 45 per cent of dealers have considered selling up due to increasing standards demands from manufacturers, seven per cent up on 2006.

Sue Robinson, NFDA director commented: ‘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.’

Robinson adds: ‘The NFDA will continue to help build bridges between manufacturers and dealers, so that our members can achieve an equitable situation.’