Large dealer groups development: the pursuit of scale

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Publication Number: Executive Briefing 06/18

Author: Pascal Haubenreisser

Date: July 02, 2018

Tags: Dealers

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Looking at how the automotive retail and the retail environments are changing and will continue to do so in the future is at the core of ICDP’s research, and an area we have been tracking from a number of different angles. We recently looked at the development of sales and service networks for all brands in the 36 European markets and in particular at the evolution of large dealer groups in terms of their performance and strategic actions to secure their position and improve their long-term performance. The need for scale to develop and strengthen the business has been recognised by a number of players who have found growth opportunities, despite an overall negative trend in network sizes. The latter has been accompanied by a steady consolidation in investor numbers, varying in frequency and deal size by market, but happening increasingly across borders. As a consequence, the large dealer group “winners” keep growing and usually outperform the average network performance, using their scale and leveraging scale effects resulting from various strategic initiatives they have implemented. However, there are still opportunities to secure their future and operate a balanced and robust business, despite the intensifying pressures on the current dealer model.
For this research, we have analysed data from our European Car Distribution Handbook (ECDH), drawn on data from our development of the “Guide to Europe’s Biggest Dealer Groups” published by Automotive News Europe, and combined this with secondary material to give a comprehensive overview on network and dealer group developments in the major European markets.
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