Dealers are doubtful whether they will meet their manufacturing partners’ new car sales targets due to current market conditions.
The question featured in the latest NFDA’s Dealer Attitude Survey which was carried out over a five-week period and asked franchised dealers in depth questions about their business relationship with their respective manufacture partnerships.
With an average score of 5.9 the question on whether the dealer would meet manufacturer sales targets in the current market suggested a lack of confidence against the prevailing weak economic backdrop.
MINI topped the list with a score of 8.4, closely followed by Kia with 8.3 and Nissan rounded off the top three with a score of 7.4. Jaguar (3.4), DS (3.8) and Volvo (4.3) received the lowest scores.
Published on 8 April, the survey also pointed to current profit returns also experiencing a slight decrease, with an average score of 6.1, down by – 0.1 from the Summer 2023 edition (-1.6% change).
“Assessing the trends, from previous DAS surveys, current profit return scores have been variable with dealers having had to weather shortages in the global supply chain and a cost-of-living crisis,” said Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA) which represents franchised car and commercial retailers across the UK.
Kia held the top spot with a score of 8.8, a reduction of – 0.3 from their score of 9.1 in the previous survey. MINI and Lexus rounded off the top three with scores of 8.3 and 7.7 respectively. The lowest scores were received by Jaguar (2.7), DS (3.5) and Seat (3.9).
Conversely, dealer satisfaction levels for future profit returns appear more optimistic with the average increasing to 6.1, a 0.3 increase. Again, Kia held the top spot with 8.7, followed by Lexus with 8.0 and Dacia with 7.7. Jaguar (3.1), Seat (3.5) and DS (3.5) received the lowest scores although Jaguar and DS did improve on their scores received in the previous edition (1.6 and 1.3 respectively).
The survey indicates that used vehicle margins continue to outperform new vehicle profit although there are some clear deviations across different brands.
“Over time, the DAS has shown a widening gap between the profit margins of new and used vehicles, reflecting the relative strength of the used market and potentially the impact of evolving new vehicle margin models,” said Robinson.
Kia scored high on both new and used vehicles receiving scores of 8.4 and 9.1 respectively. Audi received the lowest average score, receiving 4.2 for new vehicle margins and 5.5 for used vehicle margins.
