Car makers stepping in with help for their dealers

Well it’s starting to happen as we hear that some of Europe’s carmakers are having to throw financial lifelines to their dealerships.
The Financial Times reports that Daimler and Volkswagen in Germany have created emergency programmes to prop up ailing dealers with Volkswagen, in particular wanting to stop the collapse of sales networks which have been built up over years.
Carmakers can also help dealers build their customer base or reduce costs by temporarily easing standards.
The Manufacturers, who have over the course of the last few years introduced standards which have been very costly such as dealer refurbishments and processes which have been designed to grow the brand market share at the expense of dealer profitability, now find themselves in a position of having to support the long suffering network of franchises which are struggling to even to survive, let alone turn a profit in this market.
What form this support will take is up for discussion. Will it be directly financial or will they ease off from providing incentives only if certain criteria are met by just rewarding dealers for keeping their doors open? It is no exaggeration to say that if manufacturers do not intervene to help financially then the current situation will only worsen with certain carmakers having little or no representation in large areas of the UK, something that they have striven so hard to build in the last 20 years. Let’s face it if a massive PLC such as Pendragon can go down this road (share price 5p) then imagine the effect that this will have on smaller franchises who can sometimes be sponsored by a manufacturer and are therefore solely reliable on the decisions made by them for their survival.
If this situation is not rectified be prepared to travel many miles to have your car serviced or repaired to manufacturer’s standards in future.