VERONA - Life is getting tougher for small, often family-owned, dealers in Europe.
These dealerships are folding as big independent dealers get bigger and automakers increase the number of outlets they directly own.
Family-owned dealers were squeezed after many carmakers introduced costly showroom standards when new contracts were negotiated for the October 1 2003 block exemption changes.
Higher dealer standards deterred small operators from running car dealerships, said Leonardo Buzzavo, lecturer in business strategy and international marketing at Ca'Foscari University in Venice and ICDP Italian market coordinator. Consequently, "many carmakers had no alternative than to operate directly," he said.
Small dealers remain the biggest players in Italy and Germany, where they cover respectively 78 percent and 83.5 percent of the total.
"In the coming years, we can expect a further growth of big dealers in Germany and Italy, because in these markets the process of concentration lags behind the UK and France," said Buzzavo.
"Automaker-owned outlets are unfair competition for independent dealers," said Jürgen Creutzig, president of CECRA, the Brussels-based body that represents 350,000 between dealers and repairers.
"Using these outlets, carmakers sell vehicles to final customers, sometimes even at prices which are lower than what official dealers pay for," he said.
CECRA asks for a clear separation: "Carmakers should make vehicles and dealers should be the only ones allowed to sell them," Creutzig said. He noted that's the way it is in the US.
Automaker-owned outlets account for 15 percent of new-car sales in France, 7 percent in Germany, 5 percent in the UK and 2 percent in Italy, says the ICPD.