Opel dealers' morale is low

Russelsheim. Opel dealers in Germany claim they are not earning enough profits because of new contracts they were offered three months ago.

Some are so unhappy with Opel that they may defect to other brands.

Opel dealers were given new contracts in October when new EU block exemption regulations covering auto sales and repairs came into force. Opel dealers are still unhappy with the contracts.

"The contracts are incredibly over-regulated and unrealistic. The morale within the dealer network is low," said Uwe Heymann, the Association of German Opel Dealers' legal advisor.

Heymann said Opel's model range is now very attractive but the association believes significant mistakes have been made in sales and marketing, resulting in poor sales figures.

According to the association Opel dealers currently suffer from profitability problems.

Most say they have a net return on revenue of less than 0.5 percent but Opel denied this and said that the average return on revenue is 0.9 percent.

According to the association several dealers are now refusing to invest any further in the Opel brand and are toying with the idea of defecting to other brands.

"The reason is that there is not enough incentive to sell high volumes. The volume bonus was cut from 1.96 percent to 0.8 percent," said the dealers association spokesman Hans-Joachim Flohr .

Opel executives rejected the criticism. One Opel manager even said the dealers' complaints were "cheap propaganda and a smear campaign" against sales director Uhland Burkart.

Opel said sales programs will be simplified from the beginning of 2004.

The next meeting between the two parties will take place in mid February.

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