Dealers in South Africa are not getting a fair deal, says Trevor Finn, chief executive of Pendragon dealer group in the United Kingdom.
Dealers in South Africa are not getting a fair deal, says Trevor Finn, chief executive of Pendragon dealer group in the United Kingdom.
Finn was part of the panel discussing the future role of the manufacturers and dealers in the motor industry at the CAR Conference at the Auto Africa show in Johannesburg.
Finn, who has dealerships in Britain, Germany and the United States, said it was “dealer heaven” in California. “Dealers are very well protected in California,” he said. So much so that a manufacturer cannot appoint another dealer of the same brand close to an existing one and agreements cannot be ended very easily.
But, he said, there were some bad aspects and part of the problem was that some dealers were not making the necessary investments in their business as they were so protected.
Finn said South Africa was at the other end of the scale, where the dealers were not treated fairly. They could have agreements ended within 30 days, depending on the details of their contracts. He said the new Block Exemption rules would fall between the two situations in the United States and South Africa.
“The new rules were introduced because it is not in the consumers’ interests for the dealers to be so disadvantaged,” Finn said.
CARtoday.com reported earlier this week that according to the new European rules, manufacturers have to give written reasons before ending agreements. Dealers will now have more security.
Ray Nethercott, chairman of National Automobile Dealers Association (Nada), said the developments of the Block Exemption rules would largely dictate thinking and changes in the motor industry in South Africa.
Nethercott said a quality relationship was needed between dealers and manufacturers. He said the situation where dealers could be given 30, 60 or 90 days’ notice was not acceptable. “You may have invested a huge amount in your dealership and tomorrow you could lose it,” he said.
Moira Moses, managing director of the Premier Automotive Group, agreed the agreements were not fair. “The notice period for termination clause in particular is unfair,” she said. But she felt that some dealers were not moving to make changes. “Dealers are still very male-biased and women are finding this in the reception they receive. Dealers must address this,” she said.
Nethercott said the current situation was not acceptable and the dealers and manufacturers should work together to solve the problems and cut costs. But, he added, Nada would look at legal routes if it was necessary.