Fleet News

Car makers 'won't buy up dealerships'

MANUFACTURERS have shunned suggestions that they might buy up their dealership networks to keep control of their outlets following publication of the New Cars Inquiry. One of the main thrusts of the commission's report was to loosen the ties between manufacturers and dealers in a bid to encourage more competition and drive down prices.

But already there are warnings that the proposal for dealerships to gain the same volume discounts as fleets could force some of the smaller outlets out of business and encourage manufacturers to take action. But Alan Pulham, franchised dealers director of the Retail Motor Industry Federation, said: 'The idea of 300-plus dealer groups worries the manufacturers because then the relative power base is beginning to shift. Manufacturers will not be comfortable with that and they will defend the small dealer.'

However, he said this would not go as far as buying up dealerships. Christopher Macgowan, chief executive of the Society of Motor Manufacturers and Traders, said: 'The whole thrust of the report is based around a greater bargaining position for dealers in their negotiations with manufacturers and any acquisition of dealers by manufacturers is contrary to the report. But some manufacturers already own some dealers and I cannot believe that this Government has any intention of outlawing manufacturers owning dealers. That would be quite ridiculous.'

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