Fleet News

Experts say franchised-dealers numbers will plummet

THE number of franchised dealers will fall by almost half over the next decade, according to industry experts at Sewells International. Market watchers at Fleet News' sister publication predict the total number of franchised dealerships will drop from 7,430 at the end of last year to 4,660 by 2005.

Sewells attributes this 38% fall to a growing trend among dealer groups and some manufacturers to 'downsize' networks in a bid to cut costs and maximise margins. According to the latest research by Sewells, the trend began in the early 1980s but was masked by small increases in the number of outlets during 1993 and 1994. But these were effectively brought about by redefinition of networks rather than real growth.

The Sewells findings follow numerous warnings about the future of the franchised dealer network from several large dealer groups and some manufacturers.

Earlier this year Lex predicted a huge drop in the total number of dealerships and announced a large reduction in its own network (Fleet News, March 1). More recently Rover said it was to slash its representation by around 25% (Fleet News, April 19). The implications for fleet operators could include more direct deals with manufacturers to source vehicles but a downside could be a cut in the number of servicing outlets.

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