01 August 2016

There’s nothing like a bit of healthy competition to help you remain sharp and focused in the competitive world of auto retailing. And while new car sales remain a mixed bag for some, growing an aftersales business can prove financially rewarding. However, for all the competitive threats out there – including the emerging online sales aggregators – it’s doubtful that any retailer would welcome the prospect of competing against an OEM partner.

Consider the potential plight, then, of Peugeot and Citroen retailers, who face the prospect of competing directly against local independents for workshop-related business. Big deal, you say. It’s every man for himself, after all. Would your attitude be different if the ‘competition’ was facilitated by the very OEM you had a relationship with?

With PSA’s recent purchase of Danish online price comparison website Autobutler, that’s exactly the scenario faced by retailers. And while the OEM says it hopes the acquisition will help channel more business through franchised workshops, there’s an inevitable whiff of ‘race to the bottom’ when talk turns to pricing jobs for the consumer. 

Now, the concept of a car maker exiting the retail business isn’t new – Auto Retail reported on Mercedes-Benz Retail Group selling a large portion of its business in May – but potentially engaging in and diluting an existing business activity?

Granted, it’s early days regarding the PSA deal. But the business model does have the potential to confuse the consumer. Crucially, the hard won efforts of the retailer to cultivate trust and repeat business could be for nought if an owner takes the potentially cheaper option only to be stung by a poor experience. And for all PSA’s focus on a digital future, its reputation – along with the retailer’s – could easily be tarnished. With the latter, thanks to its more tangible, physical presence, likely to bear the brunt of any criticism, be it online or by word of mouth. Time will tell if PSA’s acquisition is a smart business move or an unnecessarily disruptive threat to established franchised auto retailing.

Iain Dooley

Editor, Agenda

Auto Retail Network

Tags: aggregtor, auto retailer, Autobutler, Citroen, independent garage, OEM, Peugeot, PSA