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A question of attitude

By / 5 years ago / Comment / No Comments

If you use local dealers to source and service your fleet vehicles then you might find it useful to know what they think of the brands they represent. Not all manufacturers own and operate sales outlets and even those that do (including Ford, Mercedes-Benz, PSA Peugeot Citroën, Renault, Porsche and Infiniti) don’t control every single dealership and are therefore dependent on representation from a cross section of retailers from small to medium sized family-owned operations and entrepreneurs developing regional groups to billion pound turnover companies listed on the London Stock Exchange with national reaches.

The dealer-OEM relationship is a complex one in which the latter has the upper hand in terms of geographical location, corporate identity, volume targets and workshop throughput. Anecdotal suggestions that OEMs dictate the colour of floor tiles is pretty much borne out by conversations with dealer bosses. The level of investment expected by a dealer to make in a showroom to enter and then remain part of a manufacturer’s network is considerable and the returns are slender with the average dealer site currently seeing a return on sales of just 1.2%, according to ASE, the dealer profitability specialist.

So what do dealers think of the brands they represent? It’s an important question and one that is addressed twice a year but rarely does the answer filter back to fleet managers.

The research is carried out by the National Franchised Dealers Association (NFDA) which, as part of the Retail Motor Industry Federation, polls the views of its members across the UK and reports its findings every winter and summer and with the bulk of the questions remaining unchanged it is an invaluable means of monitoring the ebb and flow of manufacturers’ fortunes.

The newly published Winter 2015-2016 NFDA Dealer Attitude collected the views of 1,603 dealers from a total universe of 4,065 sites; a particularly high response rate following the record breaking new car market of 2015 when 2.63 million cars were registered.

The research is thorough with dealership bosses asked about the fairness of their manufacturer sales targets, volume bonuses, current and future profit potential and their expected level of capital investment. Each response if broken down by brand with an overall average showing who the winners and losers are in each category. There is nowhere to hide, especially as the survey also shows where each brand stood six months previously.

This year saw a remarkably low average score of just 6.1 (out of 10) with 17 brands rated above and 11 below.

So who were the top performers? Good news for Mercedes-Benz who retained the top position it has held for the last two years with a score of 9.3, although that was down 0.5 on last year’s summer survey. Lexus retained its second place with a score of 8.9, up from 8.5; while Suzuki punched above its weight taking the third place with an impressive score of 8.8, up from 8.1.

Rounding out the top five were Kia in fourth place (8.4) and BMW and MINI both in joint fifth place (7.9), with MINI improving its score from 7.7, while BMW slipped from 8.6.

Meanwhile at the bottom of the table was Jaguar, a previous high flyer scoring 7.1 just 12 months ago and now mustering just 3.7. The brand’s fall is curious as it is not without desirable new products and prestige brands traditionally score highly in the survey.

The second lowest rated brand was Volkswagen with just 4.2 points. While it would be easy to attribute its decline to the fallout surrounding its global emissions shenanigans, its fall predated the crisis having scored just 4.9 last summer. Third from the bottom was Peugeot, scoring 4.3, with Renault and Seat just above both on 4.5 points.

Although the fortunes of car brands tends to be cyclical, often correlating with the availability of desirable new product, many of the underperforming brands in this survey will already be working hard to build bridges with their retailers. But with dealer satisfaction in decline what every car brand will be asking themselves is how will they be rated when the next NFDA survey is published in September? We’ll be sure to let you know.

 

The Winter 2015-2016 NFDA Dealer Attitude Survey can be viewed at http://bit.ly/1Sd74RO

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