The working relationship between dealers and manufacturers can run the gamut from good and bad through to downright ugly. While both sides know the way to get the best out of each other is through mutual respect, trust and candour, like any relationship, this is not always the case and it can impact on key clients, especially fleet customers.
The dynamics that tend to characterise these relationships are dependent on many factors. How long they’ve been together, how freshly churned the product line-up is, the desirability of the cars and what the return on investment being some.
A recent tour of an Infiniti dealer in Orlando, Florida, reminded me just how different these relationships can be. In the US the dealer is king and manufacturers know it.
By and large they do not impose hugely onerous corporate identity programmes dictating the minutiae of the shading of the floor tiles and brand of soap in the loos.
Infiniti Orlando is a phenomenally successful business, owned and run by an expatriate Brit called Peter Wilson, with annual sales in the region of 950 units; that's virtually double the volume achieved last year by Infiniti in the UK!
Step inside the showroom and you could be forgiven for thinking you’ve entered a boutique hotel by mistake.
There’s expensive-looking artwork hanging from the walls, you're greeted by a polite receptionist behind a desk who will address you by your surname: the word “hi” is prohibited.
The business is a success because Wilson has carte blanche in the look and feel of the site and how he wants to run processes and systems. Brand signage inside the dealership is minimal and cars are almost incidental exhibits. The focus is on creating a non-sales environment in which well-heeled customers feel comfortable. It works.
‘I hate the car business,’ he half jokes. ‘I'm in the service business and I’m given room to manoeuvre by the manufacturer,’ he says.
Meanwhile, back in the UK dealers have recently been polled by the National Franchised Dealers Association on exactly what they think of the car brands they represent.
The timing is interesting because from May this year EU rules, known as the Block Exemption Regulation, which have provided guidelines on how the dealer-manufacturer relationship should work, mostly in the carmaker’s favour, are set to be removed for good.
So which car brands are the most valued in the UK? Top of the bunch was Land Rover – hardly surprising after the huge company car and retail success of the Range Rover Evoque – followed by BMW, Kia, MINI and Audi.
Meanwhile the least valued were Alfa Romeo, Renault, Mitsubishi, Subaru and SEAT. However, this survey showed two-thirds of dealers are happier with their carmaker partners than last year.
Talking to dealers and manufacturers, the reasons behind this rapprochement are clear. Both are emerging from a tough recessionary period and are seeing year-on-year car sales on the rise, helped by carmakers making an extra effort to deliver good, low-cost finance packages to entice consumers and businesses back. Let's hope this particular second honeymoon continues.