European dealers focusing on used cars and aftersales to survive image

Many of the independent dealer groups in Europe have turned their attention towards selling more used cars and making more money from aftersales to survive the region’s new-car sales slump.

For example, UK dealer group Pendragon was Europe’s No. 1 independent dealer group by 2012 revenue, according to a list compiled by automotive distribution analysts ICDP. They sold more used cars than new vehicles from its 238 franchise dealerships last year. Two other UK-based groups ranked in the European top 10 also sold more used cars than new: No. 4 Sytner, owned by U.S. dealer group Penske, and seventh-ranked Arnold Clark.

ICDP Managing Director Steve Young said dealer groups in mainland Europe are copying best practices from their UK counterparts, for example, on inventory. “Groups in Germany, France, Spain and Italy can carry a used car for months. Generally it is 60 to 90 days in the UK,” Young said. “Now the continental groups think more carefully about what they’re buying, and are more aggressive about disposals.”

U.S. dealer groups are likely to increase their European business, Young said. Last year, Penske set up a joint venture with Italian group Andrea Mantellini. U.S. dealer giant Group 1 has 18 dealers in the UK after buying four Ford franchises from Inchcape earlier this year.

Via Automotive News Europe