Car Dealers Freeze Pay

Franchised car dealers across the UK have responded to the downturn in the economy by freezing pay scales, according to the rts Auto Retail Industry Salary Survey 2009. The survey reports that 25 per cent of franchised dealer respondents did not increase basic pay for their staff between 2007 and 2008. More than that, it seems that dealers have been taking advantage of the industry’s high staff turnover rates to actually reduce pay rates for new recruits.

Comparing the results of the 2008 and 2009 Salary Surveys on a weighted basis across all jobs, the average increase in basic pay worked out at just 1.4 per cent and total pay – including overtime, bonuses and commission – was up 1.6 per cent year-on-year. To put these increases into context, the government’s 2008 Annual Survey of Hours and Earnings reports that average total pay for all employees (including full-time and part-time) increased by 3.3% between 2007 and 2008. Therefore franchised dealer employees have probably fared worse than average.

However the increases in basic and total pay were by no means evenly distributed. The two biggest ‘winners’ amongst full-time staff were dealer principals and bodyshop managers with basic pay up 4.4% and 3.7% respectively. Vehicle Technicians, whilst seeing basic pay rise, experienced a fall in total pay probably due to a fall in overtime and bonus. Bodyshop painters/panel beaters saw a similar fall in total pay – more than likely for the same reason.

Lead researcher Chris Oakham of Trend Tracker explained: “Increases in basic pay for franchised dealer staff have been falling for several year, but this is the lowest level we have seen since the recession in the early 1990s.

“As the research for this year’s Salary Survey commenced in August 2008, the world’s financial systems went into meltdown with predictable consequences for the retail motor industry in the UK. And these troubles follow on from a decline in new car sales that started back in 2003. Against this background, it appears that franchised dealers are already responding to difficult times by clamping down on increases in wages and salaries.”