Selling direct may not be the answer for car makers

With the number of franchised dealers dwindling rapidly and set to continue falling over the coming months, the internet will become even more vital as a tool for research and comparison. Buyers, who until recently could probably locate any number of franchised dealers within a reasonable radius of their homes, will find that they will need to travel just that bit further afield to inspect a car or contemplate a purchase. Whilst there is a powerful lobby in the United States for consumers to be allowed to buy new cars direct from the manufacturer (which is prevented by law at present) thus saving money by bypassing the dealer network, in the UK the appetite for this type of purchase is less noticeable.

Although it is reckoned that buyers could save thousands by buying direct, the reason this has never happened up until now is simple; car makers build cars and car dealers sell them and despite some manufacturers having tried to dip their toes in the market of selling new cars the reality is that they have neither the appetite or ability to do this. Even large fleet customers who generally negotiate terms direct with manufacturers still have to rely on the dealer network to administer, PDI and deliver the product to the end user and this is usually incremental business to the dealer.

If manufacturers were to sell new cars direct to the public they would still need the skill and resources of car trade professionals to stock, display and maintain and the truth is they would rather sell the cars direct to the network and allow them to represent them when selling to the consumer. Whether this changes in the foreseeable future will be dictated by the public, the nearest we have in this country are dealerships which are sponsored by the manufacturer. In this scenario a company will put up a certain amount of money and the car maker will invest and retain an interest in the direction of that business.

With governments currently bailing out car makers around the world and dealerships closing at an alarming rate and on a weekly basis, the face of new car retailing in Europe will change beyond all recognition, there can be no doubt about that. Dealers and manufacturers who recognise this will continue to forge strong partnerships and provide a better experience for the customers of the future.

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