The unbearable weight of being car dealer

car dealer

People are talking about this.
The sector is in crisis, dealers don’t see anything good in the future, consumers and companies don’t think to purchase an additional car and they wouldn’t want to even think at the time when their car will necessarily be replaced.

The race to the volumes should be considered ‘completed’, not by choice but by extreme necessity.Thanks to the collaboration of Italia Bilanci ( ) we delved into the accounts of those who work in the industry in Italy and we have discovered some good. First of all : those who were convinced that the dealer forgiveness and no manufactures, changes his mind. The manufacturers forgiveness even when “they start doing the dealers.”

In this case, they lose most of the dealers.

Size matters!

The groups have a better life: multi-branding, process efficiency, economies of scale, increased use of services, greater bargaining power with suppliers and more training are driver of the “Manual of survival.”

Have a look at the numbers and we start to analyze two charts that give us evidence of what emerges reclassifying some symptomatic balance sheet items of the dealers for 2011.
The first chart shows how, thinking in terms of (Net Income (RN)) of (Turnover (F)), 23 dealers of 2092, about 1%, report a value higher than 3%, the considered parameter of ‘excellence’.
The remaining dealer are half in an area of basic balance, for the other half in a state of profound disorder of accounts that will take them, most certainly, to the closure.


Let’s now analyze the ratio (EBIT (RO)) of (Turnover (F)).


Well, the distribution is even more troubling, essentially for two reasons: the first is that it increases the number of dealers that have a critical condition, the second is that this indicator, giving evidence of the operating characteristics of the companies , highlights like “finance” and “capital” are decisive for an appreciable net result and that it is “sterile”, in terms of outcome, management feature.
But let’s go to the major foreign companies that distribute vehicles in Italy. Check out their performance for the year 2011 (in millions of euro).


It is obvious that the whole distribution chain in the industry, except for a few cases of excellence, it is not capable of generating value, indeed, in too many cases, he destroys.

The concentration of the networks, in part managed by the manufactures, partly daughter of “natural” selection, can’t be the only way but the only viable one to add, with little effort, another chapter to “manual of survival” and “pull forward “for a while ‘.

Waiting for the details of 2012 …

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