23 April 2018

Vauxhall first, who will be next?

Some dealers at other franchises I’ve spoken to this week have shrugged off the termination news, saying it’s what the trade does periodically to streamline the network.

Possibly, but with the buying and selling of cars changing so fundamentally in the past decade, I wonder if there is more to it.

Vauxhall may be a little different after its takeover by PSA and a falling market share; cutting the network and moving closer to PSA franchises makes sense but are other manufacturers starting to think along the same lines?

In the short term some tough negotiations on stocking, (build us hybrids, not diesels!) on quarterly targets and bonuses will provide some breathing space for the franchises for many as the new car market struggles but longer term it must be questionable if manufacturers will continue paying into what increasingly looks like an expensive and out-of-date way of selling cars.

I worked in regional newspapers for nearly 30 years and that industry was smashed by people turning away from print to online news and the advertisers following them.

Faced with falling circulation and revenue, survival was through merger. In a couple of brutal years it led to far fewer titles, more centralised production processes and consolidation into bigger and fewer groups but crucially, groups with substantially lower costs.

So what’s different with the motor trade?

In today’s world where consumers research and choose their product on-line, the journey between manufacturer and the end customer will only and always get shorter.

Look at what happened to so many well-known high street names who operated on the same model as dealers of being wholesalers in buying their stock, retailers when selling it.

And in the meantime what of those dealers, Vauxhall or otherwise, looking a few years ahead and not liking what they see?

Well, some of the smaller players will be looking to expand their networks and might welcome enquiries from Vauxhall outlets. There could be scope for less well-known brands to do the same and looking for someone to sell their cars.

Chinese, anyone?

Tags: Ssangyong, Vauxhall