Selling new cars could be seen as the primary objective for franchised dealers. It does not always follow that it is the most profitable activity, or even the one with consistent and predictable financial results. (...). This report looks at the size and structure of new car distributor margins, examining the difference among brands and countries, and discussing the possible implications of current strategies. The increase in variable margin, which now accounts for a third of the total new car margin on average, is understandably causing dealers to be more and more dependent on manufacturers for their economic viability. This issue is also drawing more and more attention from competition authorities.
Dealer margin structures for new vehicles in Europe
BUZZAVO, Leonardo;
2005-01-01
Abstract
Selling new cars could be seen as the primary objective for franchised dealers. It does not always follow that it is the most profitable activity, or even the one with consistent and predictable financial results. (...). This report looks at the size and structure of new car distributor margins, examining the difference among brands and countries, and discussing the possible implications of current strategies. The increase in variable margin, which now accounts for a third of the total new car margin on average, is understandably causing dealers to be more and more dependent on manufacturers for their economic viability. This issue is also drawing more and more attention from competition authorities.
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