Fleet News

Smaller dealers face bleak future

THE Government looks set to drive Britain's smallest franchised dealers and dealer groups out of business as new legislation paves the way for large dealer groups to win fleet sales. With Trade and Industry Secretary Stephen Byers set to table new orders governing the sale of new cars in Britain in the next few days, it has emerged that the sole aim of the legislation is to ensure that UK dealers can buy cars from manufacturers on the same terms as fleets.

The DTI is confident the proposed orders will be laid before Parliament within the next week and become law from September 1 when X-plate cars go on sale. However, such optimism is not shared by the motor industry, which fears the Government may continue to drag its feet as it struggles to make the legislation 'clear and unambiguous'.

In extensive talks with senior fleet industry figures last week, a senior DTI official admitted that the aim of the legislation was to end the 'discrimination' against dealers by manufacturers and thereby ensure that franchised dealers could buy new cars on the same terms as fleets.

The legislation is expected to say that manufacturers must tell franchised dealers on a quarterly basis the list price, discounts available and volume discounts available in relation to current fleet terms. However, manufacturers argue that is a very simplistic view as no 'league table' of discounts exists and every fleet contract is different.

Sources who met senior DTI officials said: 'The DTI's sole aim is to ensure dealers can buy cars on the same terms as fleets. The investigation has had nothing to do with UK car prices.'

Such a move will give large dealer groups such as Pendragon, Inchcape, Arriva and Vardy immense buying power while smaller dealers are unable to buy in enough volume to benefit from large discounts and pass them on to customers.

Alan Pulham, director of the National Franchised Dealers Association, said he hoped the orders would be effective before September 1 although, he admitted, the Government made 'no commitment'.

Referring to the possible impact on the dealer network, Pulham said: 'I don't think we understand what shape the market will take. But it is a very flexible industry and I would be surprised if there are fewer

dealers.'

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