3:44 pm, January 12, 2021
Franchised car dealers have blasted manufacturers for continuing to issue sales targets during the third lockdown as ‘morally wrong’.
Several car dealer group leaders have said they are being pushed by manufacturer partners to chase car sales in a way they say ‘encourages bad behaviour’.
One car dealer group boss – who represents a large number of car manufacturers – said he’d had ‘awkward conversations’ with manufacturers.
‘I can’t see how manufacturers can target us to push for sales, to encourage people out of their houses to change a car that might not necessarily need changing at a time when the government is telling everyone to stay home,’ said a dealer group boss who wanted to remain nameless for obvious reasons.
‘Targets at the moment should be zero.
‘Is it really right to ask people to come and buy? I know we need to keep the economy turning, and we are trying our best, but car sales should be made to those that need them for essential reasons.
‘When manufacturers start targeting us that moves away from people buying for essential reasons and more towards chasing numbers for bonus sake – that’s just bad behaviour.’
It comes as some retailers outside of the car industry begin to end click and collect services.
John Lewis Partnership will stop click and collect at department stores to ‘avoid non-essential travel’.
Andrew Murphy, group operations director at the John Lewis Partnership, said: ‘We’ve listened carefully to the clear change in tone and emphasis of the views and information shared by the UK’s governments in recent days.
‘While we recognise that the detail of formal guidance has not changed, we feel it is right for us – and in the best interests of our partners and customers – to take proactive steps to further enhance our Covid security and related operational policies.’
Car dealers can continue to sell cars via click and collect during the lockdown but there are questions among some dealers as to whether continuing is the right thing to do.
Cap HPI’s Derren Martin told Car Dealer that dealers he has spoken to are already fearful click and collect will be stopped.
The news makes the pressure of quarterly targets imposed on dealers even harder.
Another dealer group boss said he ‘sympathised’ with the car manufacturers as the ‘cars have to go somewhere’.
Also wishing to remain anonymous for fear of reprisals, he said: ‘We have been generally guaranteed margins from most manufacturers, but it is the quarterly bonuses that are in doubt – how do we know if we’ll even be open in March?
‘At the end of the first quarter the bonuses are usually pretty substantial and we’re not aware of what they’ll be like, or if we can hit them.
‘I honestly think we should be closed as an industry – but I have shareholders and they won’t want to see that. It’s the same for all these businesses that are allowed to be open, but really should be shut.
‘Is it right to be selling cars at the moment? In my opinion, no it’s not.’
Bills to pay
Paul Hendy, CEO of Hendy Group, was one of the few dealer group bosses that would give Car Dealer a comment on the record.
His group represents Ford, Kia, Jaguar Land Rover, Honda, Seat among others.
He said: ‘Now is the time, again, for manufacturers and dealers to stand shoulder to shoulder.
‘We don’t need a target at this time to encourage us to sell as many cars as we possibly can. It is an insult to our intelligence if the belief is that it is the target that motivates us.
‘We all have bills to pay. Our teams have bills to pay.’
He added: ‘Morally we have to do the right thing for everybody and work together. Each dealership across the country will have its own story, unique circumstances and difficulties but one common objective…to keep everybody safe, and sell as many cars and vans, new and used as possible, and service and MOT as many vehicles as possible and get through this latest challenge.
‘That should be the target.’
Peter Smyth, director of Swansway Group, which represents VW Group brands, Jaguar Land Rover and Honda, among others, told Car Dealer he had ‘not had any pressure from partners whatsoever’.
He said: ‘Our partners have guaranteed margins for January and February which is great. We don’t feel under any pressure on targets and car manufacturers know they can’t really go to market and push people to buy cars.
‘We’d like to see March margins guaranteed too, though, as that would give us a lot more confidence.’
Car Dealer asked several manufacturers named by our sources for comment, including Kia, BMW, Seat and Toyota.
Toyota said: ‘We are not in any way encouraging or incentivising our retailers to ask people to leave their homes. Quite the opposite in fact.
‘We have issued retailers with annual targets in the normal manner to allow them to plan for the full year but, crucially, we have also told them that we will re-seasonalise targets to reflect the current limitations they face and remove any pressure in the lockdown situation, instead focussing on the opportunity beyond lockdown when we anticipate a market recovery.’
BMW said that the health and safety of its colleagues and customers is ‘of course our highest priority’ but added dealers are continuing to sell as per the government guidelines.
In a statement, the firm said: ‘We will continue to work closely with our National Franchise Board to make sure we respond in the most appropriate way to support our retail partners.
‘However, we do not comment on sales forecasting, neither do we discuss the remuneration agreements we have with our retailers, as this is commercially sensitive information.’
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