Survey Shows Tough Times Endure for U.K. Dealers

U.K. vehicle dealers still see profits and margins fall as auto makers’ control and the unstable economy continue hurting their businesses, a new survey shows.

The National Franchised Dealers Assn.’s dealer-attitude winter survey indicates the trend toward lower profits and profitability highlighted in last summer’s survey continues.

When questioned about how satisfied they were with their franchise’s return on profits, 65% of dealer networks reduced their rating from the last survey.

Also, 62% of networks reduced their assessment of the future profitability of their business, while 52% of dealers lowered their rating when asked about auto makers’ standards in comparison to return on investment.

The association says dealers remain concerned about their relationship with their manufacturer. While 45% of networks showed some improvement in this respect, 52% still scored it below the average mark.

When asked about the overall value of their franchise, the average among all dealers fell from 6.7 to 6.5 on a scale of 10.

BMW, Land Rover, Mercedes, Lexus and Mini were named the top five franchises, while the least-valued franchises were Chevrolet, Mitsubishi, Mazda, Subaru and Renault.

Association Director Sue Robinson says 2011 presented a highly challenging environment for franchised dealers.

“It is of no surprise dealers have indicated that their profit returns were not satisfactory at a time when vehicle sales were depressed and margins under pressure as they chased targets,” Robinson says in a statement.

“2012 appears to have begun reasonably well, with some signs that the market may make a small recovery. The March market will be key for dealers, as this is largest market of the year.”