Shake-up in showrooms

Out are the weather-beaten and often tatty showrooms and service areas.

In are glitzy customer-friendly showcases designed to give the customer unparalleled access to what is on offer.

These changes have come about in part due to the major motor manufacturers taking more control of who sells what and where, and a few dealerships many of them family-owned seeing the writing on the wall and forming groups of several franchises.

Swindon is a particularly good example of this.

About five years ago, Fish Brothers moved to create what is in effect a massive "car park" centred around Churchward, moving their various franchises into one area from several outlying sites and adding a number of new names to their stable.

The long-established Dick Lovett Group, which primarily deals in specialist and executive cars, had already made moves in this direction and in the same area.

Vauxhall dealer Skurrays, a name long established in the town, while retaining its Drove Road site, has also built a large new operation on a brownfield site in Hillmead, while Citroen dealer Windmill Hill Motors has expanded its Great Western Way site near Junction 16 of the M4.

Sudburys, also a multi-brand operation, has consolidated its operations at Dorcan Way while retaining one outlet in Groundwell Road.

A few years ago Mann Egerton moved its VW franchise to purpose-built premises just off Junction 16, and also built its adjacent Audi Centre.

Arriva Ford had planned to move from its Fleming Way address to premises it owns in Old Town but ran into planning obstacles. It is sitting tight, even though the area is part of the Swindon Development Plan and the site had been earmarked for a hotel.

But with the manufacturers requiring massive dealer investment in attractive new showrooms, parts and, most importantly, distribution, things are changing. Many in the trade would argue that they are not changing for the better.

However, when one is looking at the prospect of spending millions of pounds on purpose-built showrooms, probably to a required specification, one can still appreciate the benefits being sought.

The requirement of high investment in parts and service for increasingly sophisticated vehicles might also be considered reasonable, providing the cash is available or can be obtained at not too great a cost.

But for many dealers, the real rub comes with distribution.

With the larger manufacturers reducing the number of main dealers, they are creating a peculiar situation for the chosen few, many of whom find the honour is something of a poisoned chalice.

The smaller operators who used to deal direct with the manufacturers are now satellites of the main dealers, with a much smaller percentage of the take.

Indeed, they are quite likely to be owned by them as well.

Good news for the main dealer, one might think, but that is not always the case.

The main dealers are now often in the position of having to take all the stock from the manufacturers as well as taking on the job of redistributing to the satellite outlets, with all the costs and logistical problems involved, to say nothing of ensuring the approved servicing is attended to.

And the situation gets better or worse depending on how one looks at it.

It certainly seems to be getting better for the manufacturers the big ones at least.

A single delivery of vehicles and parts to just one dealership instead of several, with all investment and moving on costs being dumped on the main dealer can't be bad.

But there must be good reasons for this huge change of operation? It can't all be just making more money for the shareholders?

That is matter of opinion. The makers of cars are having to make huge investment into the production of the increasingly sophisticated vehicles we buy.

No longer do we see facelifts and model changes every five years or so they tend to be much more frequent in order to satisfy consumer demand.

Often last year's concept is this year's production model, although one has to query whether this is not sometimes pre-ordained.

Keeping up with the pace of technological change, to say nothing of customer preferences, doesn't come cheap.

However, for all the hype generated by manufacturers who insist that they listen to and act promptly in response to customer demands, it seems to me that we are much more driven to what they want to sell than what people actually prefer.

But then, this has always been so.

Manufacturers will say, arguably with some merit, that when it comes to dealership and distribution control, big is beautiful, and in having fewer franchisees they increase efficiency and service for the buyer.

But I am far from convinced.

Already there have been some casualties as individual and group dealerships come to grips with new ways of operating, usually involving far greater investment than previously.

And it isn't just the big boys who have been hit.

At present Hyundai is no longer represented in the town while Swindon's new Volvo franchisee, the Newbury-based Fawcett Group, has set up a temporary headquarters in Swindon at Unit 1, Callendars, off Paddington Drive in Churchward Park, and is looking for a permanent site to build on, possibly on a brownfield site not too far from Junction 16.

There have been reports of a car dealership going into the former Brown Brothers building in Dorcan Way and there's a brownfield site up for grabs near Vauxhall dealers Skurrays in Hillmead where Suzuki dealer Pebley Beach Garage of Wroughton had planned to relocate.

Indeed, the former Volvo site on Kembrey Park is now the temporary headquarters for the new Mercedes dealership, Sytnar Mercedes-Benz Swindon. It is looking to build a new site elsewhere.

Whatever the merits of bigger being better for some, many will see it as nothing more than a squeeze played by the major manufacturers to cut costs and responsibility and make more profits, reducing margins for the dealers and ultimately offering the customer less rather than more choice. It is argued that these days you can order your new car exactly as you want it, with a mix and match availability to suit every taste.

Indeed, all this can be done via virtual showrooms, whether at dealerships or through the internet.

Good news? Well for the manufacturers it is, for in effect while encouraging the idea by saying you are getting a car likely to be unique to you, they are also increasing the made-to-order ethic so that there are fewer of their new cars sitting around in fields and compounds awaiting sale.

The question has to be, how long does one have to wait for this "unique" car?

And when it does eventually arrive, does it in fact have everything you have asked for?

And does its "uniqueness" increase its value on resale, or does it have the opposite effect?

It would be nice to think that the motor moguls ponder such weighty problems deeply, but I suspect they do not ponder for long, if at all.

They are interested only in numbers sold. What the customer wants, whatever the moguls might say, is of little relevance.

Getting your name on the dotted line, preferably on an hire purchase agreement, which also generates income, is really all they are interested in. To the manufacturer, catering for customer preference is of fleeting interest when selling, and of no relevance at all after the deal has been done.

It is the dealer who has to convince the punter that they have got a good deal. And, with smaller margins, greater competition and an unstable used car market, this is harder to do.

Changing methods of sale, bigger investment and, crucially, smaller margins have all seen to that.

The customer might be left with greater selection overall, but in truth, less choice within a given make of car.

But there is a price to be paid, and it usually revolves around just that price.

There are no bad cars. It is all about good value within a given price range, and when one looks carefully, this leaves the punter with a lot less personal choice than he or she might imagine.