The “brave new world” of franchised dealerships we have been describing, where manufacturers start to reign in the demands they make of their dealers in order to achieve and maintain mutual profitability, appears to be starting sooner than we thought. Mitsubishi has announced that is to assist its dealer network with new cost cutting initiatives and improved dealer incentives.
Mitsubishi UK Chief Executive said:
“Our new shareholder, Mitsubishi Corporation, is one of the biggest companies in the world and it is at times like these that having a big, strong parent really pays off. They are taking a very sensible long-term view and want to ensure that our dealers make a profit with a positive cash flow in 2009. To do this, we know we have to achieve a reasonable sales volume, whilst remaining entirely reasonable about our expectations.”
Mitsubishi’s year on year sales and parts turnover was down in 2008 but their was better news from the service side where turnover and profits were both up.
As long as “certain criteria” (sounds ominous) were net Mitsubishi said it would be reducing its basic charges and reckoned on a dealer selling 300 vehicles a year saving £50,000 and bigger dealers with multiple sites up to £100,000. It also added that the plan was not part of any trading margin.
Mitsubishi also plan to focus on reduced demonstrator requirements, reduced vehicle stocking cost, 180 days free stocking on new vehicles and a new web service which will allow dealers to personalise their offerings, change their sales messages and special offers while keeping in line with Mitsubishi “corporate identity”.
All in all very promising and we could be seeing the pioneers leading the way into the brave new world.
More will be sure to follow so watch this space.