New-car dealers are free to expand their territories - but big German retailers are instead adding brands.
The 50 biggest German dealers are largely ignoring the October 1 ending of European Union rules that allowed automakers to limit where their authorized dealers could locate.
A survey by the International Car Distribution Programme (ICDP) finds that the percentage of the biggest 50 German dealers that plan to expand their territory by 2009 will actually decline slightly.
The ICDP's look into the future was only done in Germany, although ICDP tracks new-car retailing in Europe's four largest markets: Germany, the UK, France and Italy. The project is run by industry experts and academics and is funded jointly by carmakers, dealers, suppliers, representative bodies and governments.
Dealers say they see more opportunity and less risk in adding brands and additional outlets in the area they know best. Certainly, German dealers have been doing so recently.
In Germany, the ICDP found that while 90 percent of the largest German dealers sold only a single brand in 2002, two years later 52 percent had switched to multi-brand operations. And by 2009, the dealers expected that proportion to reach 65 percent, they told ICDP.
Uwe Stratmann, a senior researcher for ICDP, sees four reasons why dealers are adding brands but have little interest in expanding their territory.
"We are not looking to expand in Europe or other parts of Germany," Beier said. "I don't think we will expand into another country."
But he said Niedermair & Reich Managing Director Anton Reich is considering adding Hyundai at the company's second Munich-area location.
Dutch-based Kroymans dealer group is a multi-national operation and its Kroymans Deutschland arm is considering moving into new markets in Austria and Switzerland. But its current growth emphasis is less on new territories and more on expanding offering of products and services, said Werner P. Roeser, director of communications.
"Our first goal is to offer the customer a wide selection," Roeser said.
Kroymans wants to offer customers multiple brands; comprehensive insurance, leasing and financing services and adding brands to fill product gaps in vehicle segments, he said.
— Alex Ricciuti contributed