Germany’s Car Dealers Dissatisfied with Manufacturers: The Changing Landscape of the Automotive Industry

2023-06-30 07:00:00

Germany’s car dealers have never been so dissatisfied with their manufacturers. Dealer satisfaction fell for the fourth time in a row and only reached the school grade of 3.421, the worst value since the survey began in 1998. In the second quarter of this year, the Institute for the Automotive Industry (IfA) in Nürtingen asked 1200 brand dealers how they did business and evaluate the relationship with their manufacturer. The “MarkenMonitor 2023” shows a gloomy mood this year, especially for the German volume brands.

The “historically bad mood” in the car trade, despite increased returns and a solid financial year 2022, is primarily “due to the uncertainties regarding future prospects,” says Professor Stefan Reindl, head of the IfA Institute. Not only because of the introduction of electromobility, the car trade is on the verge of a radical change. Many manufacturers such as Volkswagen, Mercedes-Benz, BMW and Audi are currently converting their sales to an agency model. This means that independent car dealers are becoming agents who sell vehicles on behalf of the manufacturer and can no longer freely negotiate the purchase price with the customer.

The manufacturers want to prevent high discounts in the new car business. For retailers, this means a complete change of their previous sales strategy. So far, they have mainly tried to win new customers through the price.

The overall winner of the brand monitor, Porsche, does not introduce the agency model: “Never change a running system, never change a functioning system,” said Martina Hendrichs, who is responsible for dealership contracts at Porsche. With a grade of 2.21, the sports car brand achieved almost the same rating as in the previous year and thus also led the group of niche suppliers ahead of Jaguar-Land Rover, Mini, Jeep and Maserati.

Among the German premium manufacturers, Mercedes-Benz has the most satisfied dealers, followed by BMW and Audi. The Ingolstadt team, last year’s winners, fell by almost half a note. Above all, the sales policy is increasingly being received badly by the company’s own dealers. High-yield models such as six-cylinders and station wagons are currently not available, while the new e-mobiles are not selling well.

Among the German high-volume brands, Volkswagen won, even though the dealers gave their brand a rather moderate mark of 3.73. The good performance of Seat and Cupra was a surprise: the Spanish VW subsidiaries took third and fourth place in the overall ranking. Apparently, the strategy of building a sporty, young brand with Cupra works. The niche brand Subaru came in second.

Opel experienced a crash: The Stellantis brand fell by half a grade to 4.71, taking last place among all manufacturers. In all areas, Opel dealers are dissatisfied with their brand.

In the Brand Monitor survey, the IfA Institute asks every year how dealers rate products and markets, sales policy, network policy, the used car business and followingsales. The mood in the trade in used vehicles is also declining because prices are falling once more for the first time since the corona pandemic. “We see a normalization of the market here. That increases the pressure on retailers to sell vehicles,” says Stefan Schneck, head of sales at the used car portal AutoScout24. Gone are the days when new and used cars were snatched from the hands of retailers. (cen/gr)

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