Dealers complain of rising costs

27 September 2005

• Profitability down
• London outlets struggling
• Dealers may be forced to close

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Rising costs associated with VAT and increasing regulation around the areas of insurance, employment, health and safety and the environment are undermining the profitability of selling new cars.

That’s according to the National Franchised Dealers Association (NFDA), part of the Retail Motor Industry Federation. It says rising costs associated with VAT and increasing regulation around the areas of insurance, employment, health and safety and the environment are undermining the profitability of selling new cars.

Sue Robinson, director of the NFDA, has warned: ‘Dealers are being targeted from every angle and the recent rise in the London congestion charge is just one example of increased overheads that will add hundreds of thousands of pounds to retailers’ cost bases this year.

‘The situation is compounded by vehicle manufacturers’ ever increasing investment requirements,’ said Robinson.

Robinson’s comments echo those of BMW’s UK boss, Jim O’Donnell, who told What Car? last week that London dealers are facing exorbitant operating costs. With profit in new car sales falling, he suggested it was inevitable that customers will pay higher labour charges for servicing and repair, while some dealers could be forced to close.

What do you think? Are you worried that dealers' rising costs will hit you in the pocket? Or do you think that franchised dealers make enough money anyway? Send us your comments by clicking the links below and we’ll publish a selection of the best here on whatcar.com next week.

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Dealers' rising costs will hit the motorist

Dealers make enough money