Ask a car salesman anything...anything at all.
Discussion
Signage and maintaining showrooms and forecourts to a particular brand's standards are horrifically expensive undertakings, manufacturers update them every 10 years or so and dealers are given a 2 year period in which to adopt the new corporate identity.
That's down to the chairs, rugs in the waiting areas, TV display, stands and so on, all from a manufacturer set supplier so they have a monopoly and charge accordingly. A BMW dealer group of four branches recently updated their showrooms - budget was £2m per site, spread over 5 years.
So you don't switch franchise unless it can absolutely be helped. Audi mandated that all the existing dealership buildings had to be levelled and their particular hangar style showrooms erected in their place and dealers had ten years to comply. That wasn't cheap either - so if one of those dealers were to lose their franchise, they'd need to build again from the ground up as Audi wouldn't let another brand occupy a showroom of their CI...
That's down to the chairs, rugs in the waiting areas, TV display, stands and so on, all from a manufacturer set supplier so they have a monopoly and charge accordingly. A BMW dealer group of four branches recently updated their showrooms - budget was £2m per site, spread over 5 years.
So you don't switch franchise unless it can absolutely be helped. Audi mandated that all the existing dealership buildings had to be levelled and their particular hangar style showrooms erected in their place and dealers had ten years to comply. That wasn't cheap either - so if one of those dealers were to lose their franchise, they'd need to build again from the ground up as Audi wouldn't let another brand occupy a showroom of their CI...
TommoAE86 said:
Thanks for the interesting thread all.
I was wondering how hard is it to change manufacturer for a dealer group? Do different manufacturers provide better/worse deals to a dealer group? Or is it more the same just one will offer more of x while another will offer more of y? Do manufacturers care about the presence of their brand in certain areas (in terms of coverage)?
Locally it's quite rare for any site to change a brand completely (not counting one changing from VW to Skoda) so maybe dealers are locked in for long periods?
It can be quite a long and drawn out process as there are termination periods that can be several years. Not only that you'd need to think about what equipment needs changing, showroom refits, training etc etc so you'd need to be really pissed at the manufacturer to do it.I was wondering how hard is it to change manufacturer for a dealer group? Do different manufacturers provide better/worse deals to a dealer group? Or is it more the same just one will offer more of x while another will offer more of y? Do manufacturers care about the presence of their brand in certain areas (in terms of coverage)?
Locally it's quite rare for any site to change a brand completely (not counting one changing from VW to Skoda) so maybe dealers are locked in for long periods?
Every manufacturer will have different terms for manufacturers (i.e Audi V BMW), but the terms for the manufacturer should be standard for each and everyone of their dealers. The reason I say should, is because some dealer groups will get offered additional money from time to time(end of month/quarter/year usually) to take batches of vehicles for registration. Not every dealer will take the manufacturer up on these as you have to commit to a lump of units, you can't just take 2 and get the same deal as a dealer that takes 50.
As for coverage in certain areas, yes manufacturers want a presence, and if they want it badly enough and they can't get a dealer to invest then they'll either a) build a showroom and lease the building to one of their dealers (VW have done this a few times to reduce the cost) or b) build a showroom and put their own dealer group in their (Trust Ford/Renault Retail Group/Mercedes-Benz Retail Group etc etc),
Thank you both very interesting. Feel sorry for Audi dealers, I could've swore that one close to my work went through a ton of work to change from a square hangar to a curved hangar but looking on streetview archive I guess I'm just getting old as 2008 shows the same curved hangar as it is now 
I know of an (ex) Skoda dealer that did very well from an old style showroom. Skoda told them that they had found them a new site and that the build cost was X amount. Dealer said no thank you, we're really happy where we are, our site is big enough and we have no wish to move and pay out money we don't need to. Skoda then issued a termination notice to them as they weren't prepared to keep to the brands corporate identity.... There a large dealer group on the new site now selling out of a large gin palace of a showroom.
Fast Bug said:
I know of an (ex) Skoda dealer that did very well from an old style showroom. Skoda told them that they had found them a new site and that the build cost was X amount. Dealer said no thank you, we're really happy where we are, our site is big enough and we have no wish to move and pay out money we don't need to. Skoda then issued a termination notice to them as they weren't prepared to keep to the brands corporate identity.... There a large dealer group on the new site now selling out of a large gin palace of a showroom.
Doesn’t surprise me in the slightest, I can see and agree both points of view , the worry being these dealership contracts seem to be in the favour of the manufacturer , why spend £x then have the rug pulled a few years later ?Fast Bug said:
I know of an (ex) Skoda dealer that did very well from an old style showroom. Skoda told them that they had found them a new site and that the build cost was X amount. Dealer said no thank you, we're really happy where we are, our site is big enough and we have no wish to move and pay out money we don't need to. Skoda then issued a termination notice to them as they weren't prepared to keep to the brands corporate identity.... There a large dealer group on the new site now selling out of a large gin palace of a showroom.
There are exceptions, my local Skoda dealer is Turners of Earlestoke, they trade out of what looks like an old detached house...https://www.google.com/maps/uv?pb=!1s0x4873d8e276c...
pistonheadforum said:
On a brand new car from a major manufacturer (Honda/Toyota) costing approx £23k what is the (rough) profit to the dealer on it's sale? Total profit not including any future servicing work.
Many thanks.
How long is a piece of string? Both manufacturers will have different terms matrix in place, what discount off list price? Any finance or kesh no bits deal? Then do you look at back end money available? If so, have they hit target? What about over target? Demo model mix right? All staff up to date on training? Finance penetration target?Many thanks.
Deerfoot said:
There are exceptions, my local Skoda dealer is Turners of Earlestoke, they trade out of what looks like an old detached house...
https://www.google.com/maps/uv?pb=!1s0x4873d8e276c...
I know that dealership, I had a customer a few miles down the road from there. Your local Skoda dealership is now a Subaru dealership and your next closest is now Platinum in Bathhttps://www.google.com/maps/uv?pb=!1s0x4873d8e276c...
Or Westover in Salisbury
I'd say your local guys didn't wish to invest millions of pounds so were terminated
Fast Bug said:
I know that dealership, I had a customer a few miles down the road from there. Your local Skoda dealership is now a Subaru dealership
Ah, I haven't been there for a while, I still occasionally see a new-ish Skoda with Turners of Earlestoke advertising on the number plate..I can't see Subaru making a killing round there, the next Subaru dealer is in Dorset I think.
pistonheadforum said:
On a brand new car from a major manufacturer (Honda/Toyota) costing approx £23k what is the (rough) profit to the dealer on it's sale? Total profit not including any future servicing work.
Many thanks.
Take the lookers Plc annual report as an exampleMany thanks.
http://www.lookersplc.com/~/media/Files/L/Lookers/...
Page 24 says new car sales = £2,395m and page 25 says gross profit on that = £161m
Extrapolating £23k = £1,546
Subaru have sold 1300ish cars year to date, I'd imagine that dealership will be as busy as the one near me in Haslemere. I've never seen anyone in there when I've been past it.
I'd imagine that not many manufacturers want to take that old Skoda dealership on, it doesn't tick and corporate identities sadly. It's odd S when you drive through Europe you see all sorts of buildings as main dealers, yet in the UK they always want big glass fronted places? Smaller dealers can't or don't want to take on that expense so they lost the brand and one of the big boys step in and shell out for a new dealership
I'd imagine that not many manufacturers want to take that old Skoda dealership on, it doesn't tick and corporate identities sadly. It's odd S when you drive through Europe you see all sorts of buildings as main dealers, yet in the UK they always want big glass fronted places? Smaller dealers can't or don't want to take on that expense so they lost the brand and one of the big boys step in and shell out for a new dealership
The funny thing is with the smaller more personal and perhaps less polished looking dealerships; many purchaser actually prefer them, they find them less intimidating and more friendly.
We frequently receive favourable comments about our friendly, welcoming and un pretentious way that we operate and have people travel past the big gin palaces to deal with us.
We have the latest standards, but in a smaller and less polished building.
We frequently receive favourable comments about our friendly, welcoming and un pretentious way that we operate and have people travel past the big gin palaces to deal with us.
We have the latest standards, but in a smaller and less polished building.
Just wondered if some of the sales guys can offer a reality check on a bid a dealer made for a car I have. The dealer appraised my car, told me what they would spend on it to put it on the forecourt (tyres, paint for stone chips, warranty etc). They told me they would spend £4500 on it, which sounded reasonable. The closest car to mine on sale is £43k. I was offered £29k. So at £29k with £4.5k costs to get to retail standard that's £9.5k below what similar cars are advertised at. But even if those cars are really selling at £40k I'd say that £6.5k profit on a used car of that value seems a tad excessive, especially as that wasn't a straight sale to them but rather based on the car being a PX on something else they would presumably also be making a profit on. To add, the dealer wanted the car to retail, it wasn't like it was something they wouldn't want to sell.
Any thoughts? Is that really the realistic profit target on a car at that value?
Any thoughts? Is that really the realistic profit target on a car at that value?
HTP99 said:
The funny thing is with the smaller more personal and perhaps less polished looking dealerships; many purchaser actually prefer them, they find them less intimidating and more friendly.
We frequently receive favourable comments about our friendly, welcoming and un pretentious way that we operate and have people travel past the big gin palaces to deal with us.
We have the latest standards, but in a smaller and less polished building.
Agree 100%, you usually find staff have been there a lot longer than your big dealer group and the customer gets a better standard of serviceWe frequently receive favourable comments about our friendly, welcoming and un pretentious way that we operate and have people travel past the big gin palaces to deal with us.
We have the latest standards, but in a smaller and less polished building.
Deerfoot said:
Fast Bug said:
I know of an (ex) Skoda dealer that did very well from an old style showroom. Skoda told them that they had found them a new site and that the build cost was X amount. Dealer said no thank you, we're really happy where we are, our site is big enough and we have no wish to move and pay out money we don't need to. Skoda then issued a termination notice to them as they weren't prepared to keep to the brands corporate identity.... There a large dealer group on the new site now selling out of a large gin palace of a showroom.
There are exceptions, my local Skoda dealer is Turners of Earlestoke, they trade out of what looks like an old detached house...https://www.google.com/maps/uv?pb=!1s0x4873d8e276c...
https://www.google.com/maps/@50.2759825,-4.9991229...
tomble22 said:
Deerfoot said:
Fast Bug said:
I know of an (ex) Skoda dealer that did very well from an old style showroom. Skoda told them that they had found them a new site and that the build cost was X amount. Dealer said no thank you, we're really happy where we are, our site is big enough and we have no wish to move and pay out money we don't need to. Skoda then issued a termination notice to them as they weren't prepared to keep to the brands corporate identity.... There a large dealer group on the new site now selling out of a large gin palace of a showroom.
There are exceptions, my local Skoda dealer is Turners of Earlestoke, they trade out of what looks like an old detached house...https://www.google.com/maps/uv?pb=!1s0x4873d8e276c...
https://www.google.com/maps/@50.2759825,-4.9991229...
Butter Face said:
I think as a whole, that place works quite well in a village like Tresillian with the estuary behind it. Looks quite smart.
Definitely, would look odd having a modern glass box there. Drove past last week and there was an R8 parked outside which made it look even better!!tomble22 said:
Butter Face said:
I think as a whole, that place works quite well in a village like Tresillian with the estuary behind it. Looks quite smart.
Definitely, would look odd having a modern glass box there. Drove past last week and there was an R8 parked outside which made it look even better!!
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