Franchised dealers will suffer worst over next 12 months, say experts
publication date: Oct 13, 2008
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author/source: Robin Roberts
Franchised cv-dealers will be hardest hit over the next 12 months as vehicle sales stall, according to EurotaxGlass's experts.
Analysts at the valuation company say the independent dealers will have greater flexibility in what they buy and sell but franchised operators will be dictated to by their manufacturers who are locked into production schedules for months ahead.
George Alexander, editor of the Used CV guide by EurotaxGlass's says franchised agreements encourage investment in big sites, corporate standards and large debt which leaves the dealer little room for manoeuvre.
On the other hand, independents have a lower cost base and can respond more quickly to market changes, stock levels and customer requests. "Franchised dealers are almost uniquely vulnerable to a market downturn" he said.
"To make the most of the prevailing economic conditions, dealers need the freedom and the necessary finances to stock older vehicles which represent a profit opportunity rather than just new and late-plate examples that rapidly become distressed sales."