A RETAIL REVOLUTION prompted by expected changes to EU distribution laws after 2002 may come sooner rather than later.
There were several developments last week.
Ford formed a joint venture with Jardine International Holdings, the UK's largest dealer group.
Ford Chairman Alex Trotman said the company expects to hold an ownership stake in a significant percentage of its European dealerships within five years.
Sources said Renault plans to launch superstores to sell used cars in France, following the success of the Renault-owned network of new and used dealerships in the UK.
UK supermarket giant Tesco is in discussions with several manufacturers about launching a car retailing operation.
Current EU laws governing car retailing, called block exemption, are expected to be abolished or changed by 2002. Although there is still no consensus on what will replace block exemption, manufacturers and major retailers are setting out their future sales strategy now.
Trotman said Ford will strive to consolidate dealers in both the USA and Europe. 'We are going to be pushing quite vigorously,' he said. 'There's a huge rationalization going on in distribution. We haven't seen anything yet.'
The deal with Jardine Motors shows Ford wants a bigger say in how its vehicles are sold. The joint venture will be 49 percent owned by Ford and 51 percent by Jardine. The venture will initially comprise 11 Ford dealerships and four Iveco Ford commercial vehicle dealerships, with annual revenues of £350 million. It will represent approximately 3 percent of total Ford new car registrations in the UK.
The joint venture operation is also expected to buy leading independent Ford dealer group, Dagenham Motors, which would give it control of 7 percent of Ford sales in the UK.
Renault will launch its French used car superstore venture in 1999 or 2000 under the name Carevia, say company sources. Employing 150 staff at each site, the superstores would offer up to 3,000 used cars of all brands as well as a restaurant, car wash, and full finance and insurance facilities. Two Paris locations have been chosen to launch the venture, at Saint-Ouen-l'Aumone and Bussy-Saint-Georges. Renault is anxious not to frighten its dealer network with the plan, according to an insider. 'It must be accepted by the dealers because they would be the channel for providing the supply of used cars to the superstores,' he said. 'Renault is preparing for future changes to block exemption,' he added. 'It must not be surprised by any future offensive from the big European retailers or from US superstore companies like AutoNation or CarMax.'
Industry sources say Tesco is currently negotiating with car manufacturers over future deals. Tesco won't confirm the talks, although a spokesman said: 'Never say never.'
Tesco is already Britain's biggest independent gasoline retailer, selling fuel at around half of its 600 store sites.
Daewoo is currently selling cars through three UK Savacentre supermarket locations. Savacentre is a subsidiary of leading retailer Sainsbury's. Elsewhere in the UK, Daewoo owns its dealership network.