Car dealers concerned as economic climate prevails

‘Car dealers are naturally concerned about profitability in the current economic climate, but at the same time some improvements have been made in the relationship with manufacturer partners,’ according to Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), commenting on the findings of the latest NFDA Dealer Attitude Survey.

The NFDA Winter 2008- 2009 Dealer Attitude Survey, published this month, shows that dealers have concerns about ongoing financial growth, but remain confident about the future:

48 per cent of networks are satisfied with the profit return of their franchise.
58 per cent are reasonably satisfied with future profitability.

At the same time, the current difficult economic situation has solidified ongoing dealer-manufacturer partnerships:

55 per cent of dealers are reasonably satisfied with the partnership with their manufacturer
58 per cent of dealers feel that they can do business with their manufacturer on a day to-day basis

Commenting on the survey, NFDA Director Sue Robinson said: ‘Dealers are looking at ways to survive and thrive in the toughest trading environment seen for many years. Thankfully, some franchises are finding that their partnership with their manufacturer has strengthened which helps in the current climate. However, for others there is still considerable work to be done to develop the relationship.

‘However, there is still a cost to the relationship as far as dealers are concerned, and the impact of manufacturer requirements is still an issue, as is the resulting impact on profitability. Maximum efficiency is more vital than ever for dealers, so this could become a bigger issue as we go through the year.

With the Block Exemption Regulation (BER) also due for renewal in 2010, the future cannot be easily predicted. The NFDA is working with Government in Brussels and Westminster to put the case for continuity in the industry, as well as vital measures to help revive car sales. These include the NFDA’s proposals for a self-financing scrappage scheme that would provide a much-needed boost to car sales, thereby helping dealers maintain and improve profitability.’