Dealers under pressure from manufacturers

The majority of car dealers say the relationship with their brand partners is getting worse as manufacturers continue to demand high investment levels.

This is despite the fact that vehicle sales are low in comparison to pre-recession levels, resulting in tighter profit margins for dealers.

According to the National Franchised Dealers Association 2012 Dealer Attitude Survey, although profits and profitability ratings have improved slightly, dealers remain concerned about the standards imposed on their dealerships.

When rating the partnership they have with their manufacturer, 45% of networks improved their score, while regarding the future profitability of their business the all dealer average improved from 3.0 to 3.2.

Sue Robinson, director of the National Franchised Dealers Association, said: "Manufacturers have used the reported rise in registration figures during 2012 as an opportunity to increase targets. Many dealers feel they have little ability to negotiate with manufacturers on targets."

She added that the situation will not get any easier for dealers, stating that changes to EU legislation will allow manufacturers to exert greater control over them.

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