Dealer networks in Germany and in certain Nordic countries have started to reshape themselves and adopt the US model of centralization that has been proven to be more effective when recessions hit the auto market.
The US model has already been adopted by large auto retailers in the UK, which have been less affected by the financial downturns, show figures from UK-based auto retail analyst ICDP. The research firm’s top 50 dealer groups on revenue produced last year in Europe has placed British-based networks ahead of competitors based on the continent, with six UK dealers placing in the Top Ten. The chart is being led by Pendragon, followed by Sytner (owned by US-based Penske Automotive Group), and Swiss-based Emil Frey. European dealers have been using a small-scale, family-owned enterprise structure for years, according to ICDP Managing Director Steve Young.
Now the weak sales performance in Europe seen between 2009 and 2013 has triggered a desire to change for dealer groups – more prominent in Germany, Sweden and Norway. “Activity in those markets is bringing them toward the UK/U.S. dealer group model with centralization of functions, rather than a pure holding company structure as was the case only five years ago,” comments the executive. Around 50 percent of European dealers are still not at the break-even point of selling 150 cars annually, and “voluntary exit from the business becomes increasingly attractive,” claims Young. The continent also relies on too many dealers, according to a report from analyst firm Bernstein Research. While European new auto deliveries recessed 20 percent since 2007, the overall tally of auto retailers has only dropped 12 percent to 47,500.
Via Automotive News Europe