Dealer groups in Germany and the Nordic countries are starting to adopt the same centralized U.S. model that has helped make large auto retailers in the UK so resilient to downturns, according to data from UK-based auto retail analyst ICDP.
The research firm's ranking of Europe’s top 50 dealer groups based on 2014 revenue has UK-based retail bodies ahead of rivals in continental Europe, with six UK dealer groups earning a place in the top 10. The list is topped by Pendragon, followed by Sytner, which moved ahead of Swiss-based Emil Frey. Sytner is owned by U.S-based Penske Automotive Group.
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European dealers are mostly small-scale, family-owned enterprises, ICDP Managing Director Steve Young told Automotive News Europe. Even some bigger groups operating outside the UK have traditionally had a more hands-off management style, but weak vehicle sales in Europe from 2009 to 2013 forced dealer groups -- particularly those operating in Germany, Sweden and Norway -- to make changes.
"Activity in those markets is bringing them toward the UK/U.S. dealer group model with centralization of functions, rather than a pure holding company structure as was the case only five years ago," Young said.
Young cited 12th-place Swedish group Bilia, which is expanding in Norway, and No. 15 AVAG Holding of Germany as examples of dealers that are adapting their businesses to the changing market. The reasons for centralizing operations were for economies of scale and to better apply increasingly tough manufacturing standards. "For example, contact centers. To run that over extended hours at a dealership level is impossibly expensive," Young said.
The big movers up the chart have jumped places through acquisitions as smaller dealers decided to sell. In Germany, Senger climbed five places to reach No. 33 and Jacobs Gruppe rose 14 places to No. 43.