Fleet News

Confusion in Dutch dealer network

May 2000: BMW's sale of Rover has given rise to widespread confusion within the Dutch dealer organisations of both brands.

In recent years, every effort had been made to fully integrate the two companies, and this strategy was ideally suited to the concept that dealerships needed to grow in order to face advancing competition. Furthermore, a certain size and scale is vital to those wishing to continue to offer the right levels of service once selective distribution is abolished.

In many cases, under the guise of co-operation, Rover dealers were forced to give up their operations to BMW colleagues. Prestigious new premises were built in a number of places around the country, with separate showrooms and integrated workshops. Rover had already given notice on its lease contract in Vianen, as the company was scheduled to join BMW in Rijswijk in mid-May.

Those who examine the sales figures will understand the situation: Rover has a modest market share of scarcely 1%, which makes it difficult for it to support a strong sales network. BMW, on the other hand, enjoys an excellent sales network with generally solid dealers. It is thus obvious which of the two is the stronger.

But everything is now up in the air. BMW's dealers want to cut all ties with Rover. They are, of course, more than happy to be able to display the Mini in their showrooms, but that is about the limit. Dealers who feature both BMW and Rover branding on their showrooms will be forced to look for a separation.

As long as the 75, 45 and 25 Rover models remain in production there is little if any cause for concern, but if the new owner was to appear with a facelifted model range, BMW dealers could be shooting themselves in the foot. What all this means for the millions invested in new premises is still unclear. There is even less certainty regarding the future of Rover's and BMW's leasing and finance activities that have also been integrated over recent years. The divorce of the parent companies will undoubtedly have repercussions in this area. The latter is particularly frustrating for the Rover brand that already had problems in the business market. As part of BMW it had made a hesitant start in terms of regaining ground, as the German brand inarguably instils greater levels of confidence. But stories relating to the sell-off have undone that confidence in a single blow.

One thing is certain, and that is that the future of Rover dealers in the Netherlands is very uncertain.

  • Henri Stolwijk is a leading Dutch motoring journalist.
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