22 April 2014

Compiling our annual Franchising Report is always a bit of a challenge. I’m not going to bore you with all the details, but one of the issues is that we rely to a large extent on the manufacturers to give us their current return on sales and network plans.

These are hardly trade secrets. Interview any chief executive of a National Sales Company at a model launch or motor show and they will happily talk about them; plus, of course, they are discussing them with the retail groups all the time. But, ask them to write them down for you and, apparently, it’s a different matter.

Fortunately there are plenty of other sources of information. So, alongside those NSCs who had the confidence to give us their actual figures, we’d also like to thank the several auto retail group bosses who contributed and gave us the chance to validate our numbers.

You can read the detail in Franchising Report 2014 but there are a couple of headline trends I feel it’s worth highlighting.

With the benefit of almost 10 years of hindsight (our first Franchising Report was published in 2005) it’s clear that franchised networks are far more stable in recent times than many people imagine.

According to our figures, there were 5838 sales points in January 2005 and 4920 in January this year (that’s not taking into account several minor franchises). And, many of those 918 sales points ‘lost’ may well have been transformed into Authorised Repairers. There were only 379 of those in 2005; now there are 871.

The other highlight is the huge spread in return on sales, despite 2013 being a very profitable year for the industry. It’s no surprise to see Land Rover top of the league at 3.4%, or Renault (with Dacia) near the bottom at 0.7%. But Jaguar, at 0.13%, did come as a surprise.

As with all our reports and publications, the Franchising Report sets out to share analysis across the industry for the mutual good. It’s not a bad plan, if it makes us all better at what we do. I’ll let you know next year if any more carmakers see it that way.

Rupert Saunders

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Tags: car manufacturers our blog, Franchising report