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The Winter 2015 Dealer Attitude Survey is the second survey undertaken using the revised question format. The new survey has a standardised question format and all responses are on a scale of 1 to 10. This has made it easier for dealers to complete and makes the simpler to interpret. The new format has led to an increase in survey responses.
We received 1554 responses to the survey representing a response rate of 38% of the dealer networks covered. This is a significant response rate which gives a good representative picture of dealer/manufacturer relationships in the UK. The survey covered 28 franchises down 1 from the Summer 2014 survey due to the removal of Chrysler.
Dealer Profit Return
The average score for question 4a: how satisfied are you with the current profit return by representing your franchise is 6.1. This score is down just 0.1 point since last Summer, although it is 0.6 points lower than last Winter. The score suggests dealers have relatively neutral opinions on the profit returns of their franchise and although this has stabilised, it is a low score at a time when the new car market has been performing strongly.
The scores for this question tend to be wide ranging and this survey is no exception. Land Rover is the top performing franchise scoring 9.4, showing a very high level of satisfaction from its dealers. Land Rover’s score increased 0.2 points since the Summer 2014 survey, giving it one of the highest scores ever returned for this question. The networks score is one full point higher than the second scoring franchises Audi and Mercedes, with a score of 8.4. Audi’s performance in this question has made steady progress over the past few years. Back in the Summer of 2012 the franchise scored 6.2. rising steadily to the current 8.4. Their score fell marginally by 0.1 points since last Summer but still shows a high level of satisfaction. Mercedes has also shown steady improvement and their score increased 0.4 points in the Summer 2014 and a further 0.4 points in the Winter 2015 survey giving a 0.8 point improvement since last Winter.
The lowest performing franchise was Alfa Romeo who scored 3.9. This was a decline of 1.1 points since the Summer where they had shown a marked improvement with their score since last Winter. Their low score suggests the network is dissatisfied with the franchise profit return and this has worsened through the latter part of 2014. Peugeot returned the second worse score of 4.3, a drop of 1.6 points since the Summer and one of this franchises worst score for some time and the biggest fall in score across all franchised networks surveyed. Ford also had a large decline in score from 6.8 to 5.6 taking them beneath the average of 6.0. Skoda had a similar 1.2 point fall to Ford since the Summer and a huge 2.8 point fall since last Winter. Skoda dealers seem to have particular concerns with profit potential with their score moving over the year from satisfactory to dissatisfied.
Future Profit Potential
Question 4b: how satisfied are you with the future profit return from representing your franchise returned an average score of 6.3. The score was 0.2 points lower than in the Summer and 0.9 points lower than last Winter. The average had steadily climbed since the Summer of 2012 peaking at 7.2 last Winter before starting to decline.
Land Rover returned the highest score of 8.9, closely followed by Mercedes with 8.8. Audi and Kia with scores of 8.3 and 8.1 respectively make up the top four places. All have scores showing their respective networks are satisfied with the future profit potential of their franchise. Mercedes and Audi scores have fallen by 0.3 and 0.5 points respectively since Summer 2014 suggesting a little less confidence in future profits than was the case 6 months ago.
Peugeot, with a score of 4.2, was the lowest performing franchise. Their score has fallen 1.8 points since the Summer and giving them one of their lowest scores for this question for some time. Skoda is second from bottom with a score of 4.4 and their score has fallen by 1.5 since the Summer and 3.2 points since last Winter. This is a significant decline in sentiment taking them from a score well above average and indicating satisfaction to near the bottom of the table with a score suggesting dissatisfaction. Skoda’s poor score in this question is likely to be underpinned by the scores in other questions which have also fallen significantly.
Inducement to Self-Register Vehicles
The average score for question 5e: how satisfied are you with your manufacturer’s inducement to self-register vehicles is 5.4. The score suggests that dealers are not satisfied with their manufacturers in respect to self-registrations. The situation also appears to be worsening with the average score falling by 0.3 between the Summer 2014 and this survey. This was on top of a 0.5 point fall in average score between last Winter’s survey and the Summer 2014 survey.
Kia and Suzuki remain top of the table both scoring 8.1 points. Both saw an increase in score of 0.3 points from the Summer. Their respective scores suggest dealers in these two networks are satisfied with their manufacturer in this respect to self-register vehicles. Lexus with a score of 7.9 has the third highest score. Their score rose by 0.6 points from the Summer and 1.5 points since last Winter showing that these dealers have become significantly more satisfied in this area.
Skoda scored the lowest with 3.1 points, indicating significant dissatisfaction from its dealers in respect to self-registration of vehicles. Their score fell by 0.5 points from the Summer and 3.3 points since last Winter indicating that dealer satisfaction has significantly declined over the past year. Previously Skoda returned scores on or above average on this question. Seat returned the second worst score for the question of 3.9. This was a decline of 0.7 points from the Summer and 2.3 from the Winter. Unlike Seat, Skoda have tended to score below average.
Mini and Citroen have seen the greatest declines in score falling 1.7 and 1.3 points respectively since the Summer. Citroen continues a decline in score which began with the Summer survey and Mini’s score has taken them from third highest in the table to thirteenth in the table. Mercedes saw the most improved score increasing 1.2 points to 7.6 and this was followed by Jaguar whose score rose 0.8 points to 7.5.
Question 5b: how satisfied are you with your new car targeting process, returned an average score of 4.9. This score indicates that in general dealers are dissatisfied with the targeting process with their manufacturers. The issue with targeting is further emphasised by the fact that the score has declined by 0.4 points since the Summer of 2014 and 0.7 since last Winter. This question has one of the lowest average scores in the survey suggesting dealers have a particular concern with their manufacturer’s target process.
Only four franchises returned a score of 7.0 and above, indicating a significant level of satisfaction in these brands. Suzuki was the top scoring franchise with a score of 8.0, Land Rover was second at 7.9, Mercedes third with 7.6 and Kia fourth with a score of 7.2.
With a score of 2.7 Skoda have the lowest score for the question. This score suggests a significant level of dissatisfaction with their manufacturer’s targeting process. Their score is 2.9 points lower than a year ago indicating that dealers are becoming rapidly more concerned. Citroen are second bottom with a score of 2.9 and Seat third bottom with 3.1. Both Skoda and Citroen’s scores have declined since last Summer and also since the Winter 2014 survey.
Nine franchises did see some improvement to their scores in this survey. Volvo had a 0.8 point improvement bringing their score of 4.8 up to near the average. Renault and Alfa Romeo both improved 0.5 points since the Summer. Although Renault still score beneath the average they have made significant improvement on this question
Returning a score improved by 1.7 since last Winter. Alfa Romeo continue a trend of improvement starting in the Summer of 2013 which now gives them a score of 6.4.
Target Incentives – Bonus and Rebates
The average score for question 5d: how satisfied are you with your current bonus and rebates on new cars is 6.0. This score would suggest that although dealers are not dissatisfied with bonus and rebates available on new cars, they are not particularly satisfied either. The average score has slightly declined since the Summer where it averaged 6.1, and is lower than a year ago when the score was 6.8, suggesting that the situation is generally getting worse.
The top performing franchise for this question was Mercedes with a score of 8.3. Mercedes score has remained static since the Summer and suggests dealers are generally fairly satisfied with the bonus and rebates on offer from their manufacturer. Land Rover scored the second highest at 8.0, a similar score to last Winter but down 0.2 points since last Summer. Land Rover dealers though appear reasonably satisfied and have generally maintained a high score for a number of surveys.
Skoda has the worst score for this question at 3.9, down 0.7 points since the Summer and down a huge 3.5 points since last Winter. This score suggests that Skoda dealers have become very quickly dissatisfied with their manufacturer’s bonus and rebate situation for new vehicles. The next lowest scoring manufacturers are Seat at 4.7, Peugeot 4.8 and Citroen 4.8. All three franchises have had significant reductions in score since the Summer of 0.7, 0.8 and 0.9 points respectively. Last Winter all three franchises scored above average making the decline even more significant.
Dealers gave an averages score of 5.1 for question 5a: how satisfied are you that the volume aspirations of your manufacturer are realistic. This score has reduced by 0.3 points since the last survey and down 0.7 since last Winter. The score suggests that dealers are not satisfied with their manufacturer’s target aspirations and that the situation is significantly worsening. This is further highlighted by the fact that 18 of the 28 networks saw a decline in score with only 8 actually seeing any improvement. It is likely that the concerns raised in question 5b about target negotiations are an influence on this question too. Some dealers feeling that manufacturers are imposing stiff targets as they aspire to higher volumes as the new car market grows.
Jaguar, Citroen and Skoda had the greatest decline of 1.3 points. This is followed by Seat who declined 1.2 points and Ford down by 1.1. Jaguar dealers opinions have shifted from being fairly satisfied with a score of 7.4 last Summer to being fairly neutral this Winter with a score of 6.1. Their score is still above the average suggesting as a network Jaguar dealers are happier than some, but their score still suggests they are not that satisfied.
Citroen’s decline in score has moved them into joint lowest place with Skoda, both scored 3.0. This score indicates that both franchises have a significant level of dissatisfaction with their manufacturers and that the situation is continuing to worsen.
On a more positive note, Suzuki topped the table with a score of 8.5, followed by Land Rover with a score of 8.4. Both scores suggest that the respective networks are generally satisfied with their manufacturer’s target aspirations. Suzuki’s score has improved since the Summer by 0.7 moving them above Land Rover from the earlier survey, whose decline in score of 0.3 points moves them down to second place.
When dealers were asked in question 9f: how satisfied are you that your manufacturer dealer standards are fair and reasonable, the average score for the Winter 2015 survey was 6.5. This score was down 0.2 points from the Summer survey and 0.1 points since last Winter. As an average, the responses have changed little over the past year. A score of 6.5 would suggest dealers are relatively neutral about dealer standards but not totally negative. However, individual networks have seen more noticeable change.
Volvo has seen the most improvement in score for this question scoring 6.0 up 1.3 from the Summer. This is their highest score for some time. Honda scored 5.9 in the Winter 2015 survey, up 0.7 points from last Summer when their score fell to one of their lowest. Subaru, Renault and Toyota all saw significant increases in score from the Summer increasing 0.6, 0.5 and 0.4 respectively.
Citroen had the greatest decline in score down 1.8 to 4.8. They were followed by Jaguar declining 1.5 points and Land Rover declining 1.0 points. Land Rover’s decline is quite significant as their score of 6.8 is the first time they have been beneath a score of 7.0 for a number of surveys. It would also suggest that although profit return is seen as good and investment levels give little cause for concern, dealer standards for Land Rover are becoming more of an issue.
Mercedes (8.7), Kia (8.7), Suzuki (8.5) and Lexus (8.2) are the top performing franchises for this question. All have scored highly suggesting dealers within these networks are happy with the standards their manufacturers impose. Skoda (4.4), Citroen (4.8), Peugeot (5.2) and Ford (5.3) were the lowest scoring franchises and indicate dealers in these networks are at best neutral and in many cases dissatisfied with their manufacturers dealer standards.
We also asked in question 4d: how satisfied are you with the costs required in your dealership to meet franchised standards. This question returned an average score of 5.6. There was little change with the average score since the Summer with just a 0.1 point reduction, although the fall of 0.6 points from last Winter was more marked. Like the previous question the average masks a number of more significant network changes.
Subaru’s score was the most improved rising 1.1 points to 7.1 and gives them their highest score in recent surveys. Honda, with a score of 5.4, had the second largest increase of 0.9 points. Honda’s score in the Summer was one of their lowest and indicated that the network were somewhat dissatisfied with the cost of their franchise standards. The increase indicates that dealer opinion in this network have now moved to being more neutral.
Peugeot had the most significant decline in score falling 1.3 points to 4.2 showing dealers in this network are becoming increasingly dissatisfied with their manufacturer’s franchise standards costs. Jaguar and Lexus both had declines in score of 1.1 points. Jaguar’s score has been falling since last Winter when their score of 6.6 was above average. The current score of 4.6 puts them beneath average. There appears to be growing dissatisfaction amongst Jaguar dealers with franchise standards and the costs of meeting them. There is likely to be a direct correlation with the Jaguar networks response to the profit and investment questions which also indicate level of dissatisfaction.
Suzuki dealers gave the highest score for the question with a score of 8.2. This score ensured Suzuki maintained its top of the table position which it has held since Summer 2013. It also indicates that Suzuki has set franchise standards at a level that dealers are happy to invest in and that match profit returns.
Kia are the second highest scoring franchise at 8.0, followed by Fiat and Mercedes both scoring 7.5. All three franchises have seen improvements to their scores from the Summer.
Skoda was the lowest performing franchise with a score of 3.6 which fell 0.9 points since the Summer and 2.6 points from last Winter. Their score indicates a marked change with the franchise moving from being on the average for this question to well beneath and indicating a significant level of dissatisfaction. This score suggests rising costs of dealer standards within the network whilst profit returns are declining, a situation supported by responses to other survey questions particularly those around profit returns.
Peugeot is the franchise sitting second from bottom of the results table with a score of 4.2. Peugeot’s score has fallen 1.3 points since the Summer and one of their lowest scores. Peugeot is joint second from bottom with Volvo who also score 4.2, although their score has increased by 0.8 points since the Summer. Volvo’s score appears to have reached its low point in the Summer of 2014 and looks as if it now starting to improve. It is still a low score suggesting the network is still dissatisfied but it has improved.
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