Car dealers express dissatisfaction with profit return in NFDA survey

The National Franchised Dealers Association (NFDA) has revealed the results of its Winter 2016 Dealer Attitude Survey, with a high level of dissatisfaction with profit returns one of the most notable results. “It is concerning that dealers seem very dissatisfied with their current profit return, although they are more optimistic about their future profit potential,” said Sue Robinson, NFDA director. Despite the averages showing that dissatisfaction is increasing, Mercedes, Land Rover, and Kia franchises returned strong results, while others improved their scores considerably since the summer survey.

The question, ‘how satisfied are you with your current profit return by representing your franchise’ returned an average score of 5.4 points (on a scale of 0-10):

• The average score has decreased 0.2 points since winter and 0.6 points since last summer. There has also been a steady decline since summer 2013 when the average score was 6.6.
• Mercedes scored the highest at 9.1, Kia and Land Rover follow with 8.5 points. Kia shows a strong increase compared to last summer’s score of 7.2.
• Alfa Romeo and Volkswagen joint bottom in the table with only 2.9 points. Jaguar is third from the bottom with a score of 3.2, which has improved since winter’s 2.0 points.
• Renault and Seat saw the biggest improvement, with an increase of 2.3 and 2.2 points to 6.5 and 5.3 respectively. On the other hand, Nissan had a decline of 1.9 points to 4.7.

Future return score shows optimism

When rating their degree of satisfaction with the future profit return, dealers returned an average score of 5.9 points, which suggests they are fairly neutral about it:

• The score is up just 0.1 points from last winter, but down 0.1 from summer 2015.
• Mercedes had the highest score with 9.0 points, a very positive result, which is however lower than one year ago by 0.7 points. Kia held again the second place with 8.6 points, followed by Suzuki with 8.3.
• Citroen was the lowest scoring franchise with 3.5 points, a decline of 1.2 since winter and 1.3 since summer.
• Peugeot and Renault saw the biggest growth, by 2.5 and 2.1 points to 6.3 and 6.4 respectively, whilst Audi had the highest decline down by 1.4 points to 4.8.

Robinson concluded, “Interestingly, all scores for future profit apart from one were better than current profits, indicating a level of optimism amongst the franchises. Considering challenges ahead, it is vital that dealers and manufacturers collaborate to reverse any negative trend.”