Franchised dealers should hope for the best, but prepare for the worst

Did you expect the UK to vote to leave the European Union? I must admit I was a little surprised by the accuracy of our own poll, conducted for AM’s June issue. Now that the shock has subsided, and we finally have a Government again, the people in this industry can focus on what they do best – tackling any challenges that are thrown at them.

The share prices of the listed dealer groups certainly took a hammering in the immediate aftermath of the referendum, as did sterling’s exchange rates. However, as AM went to press, there were signs that both have stabilised at least.

It is perhaps unfortunate that the uncertainty comes at a point when the UK’s total industry volume may have already reached its peak. It may be easy for the mainstream media to apportion blame for the downturn in the car market to a dip in post-referendum consumer confidence, but we have already seen an entire quarter of decline in private new car registrations.

The Brexit vote is likely to have some impact on fleet and private car demand nevertheless, especially if the exchange rates deteriorate further and national sales companies ease off their incentives.

tim rose, am editorLet’s hope that newspaper claims that the UK will “skirt” recession won’t become self-fulfilling prophecies. We are only now forgetting the pain of the last one, when the same Jaguar Land Rover franchisees now investing for future growth were writing down their luxury 4x4s by four-figure sums each month.

Fingers crossed there’s nothing too dramatic in store. In any case, it looks like it’s time to revisit that five-year plan.

Tim Rose, AM editor

 

In this month's AM - Automotive Management magazine:

  • What Brexit means for car dealers
  • Jaguar Land Rover's network restructure
  • Steven Eagell on why he hirs for attitude over experience
  • Our guide to outsourcing success
  • The Suzuki Baleno reviewed