Executive Summary
Car dealers sell new and used cars, and other vehicles, finance and
insurance packages, servicing, repairs, body work and parts. New cars typically
account for a third of their sales by value, but for a much lower share of
their profits.
UK sales of new and used cars were valued at £46.8bn in 1996, up from
£44.4bn in 1995. Of this total, 55.3% were sales of used cars, up from
52.5% in 1995.
Only dealers that have been awarded a franchise by manufacturers or importers
can retail new cars. At the end of 1996, there were 6,754 franchised outlets in
the UK, down from over 8,000 in 1987.
The number of franchised outlets is falling for two reasons: car makers now
seek to enlarge local market areas on account of the prolonged fall in new car
sales of volume makes to retail customers; and car dealers' profits on new car
sales have been unacceptably thin.
Large dealer groups are improving by acquisision and by fostering profit
aftersales and the sale of finance products.
`Block exemption' by which car manufacturers and dealers can effectively limit
local competition, is safe for 4 more years at least.
Longer term, the Internet should have a significant effect on new and used car
sales through dealers, while car supermarkets attract a growing share of used
car sales.
Twelfth Edition 1997
Edited by Richard Caines
ISBN 1-85765-755-1
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