- by Brian Byrne
Big franchisees to be targeted by carmakers?
14 April 2003: The recent announcement that BMW is to set up its own sales operation in Ireland, after 36 years of ownership of the franchise by Frank Keane (above) and his Motor Import Ltd, highlights the changes being brought about by the block exemption changes in EU law, and also a row between BMW dealers and the parent company over margins.
A number of other private franchises in Ireland might well be under the gunsights of their brand carmakers, including the high-value operations operated by Ireland's biggest car distributor, Motor Distributors Limited, who handle VW, Skoda and Audi as well as Mercedes-Benz (ownede by DaimlerChrysler), and Mazda (Ford).
And a couple of 'strays' not managed here under the parent companies' aegis, such as SEAT (VW Group) sold by Hispano Cars Ltd, and Jaguar (Ford Premier Automotive Group) and Saab (GM), also distributed by Hispano-associated companies, might also be ripe for the picking.
The fact that a large shareholder of Hispano and its associated companies is also the main owner of MDL complicates matters even further, and may also persuade the real owners of the brands to consolidate their positions here under a European umbrella.
Opel Ireland has already been sorted, and is now effectively managed from Stockholm.
Ford-owned Volvo and Land Rover are indepently-run operations, but effectively 'owned' by their UK parents.
Ford of Ireland is a wholly-owned subsidiary of the parent company, and stands to benefit if the parent decides that it should manage all Ford-owned brands in Ireland.
Indeed, regular meetings take place between the Irish CEOs of the key Ford brands, at which presumably more than gossip is exchanged.
Meanwhile, it may well be that - as sales are more or less matched by BMW in Ireland - DaimlerChrysler could well be considering whether to take over directly sales of the three-pointed-star brand here.
And they might also figure they could handle more profitably their Chrysler-Jeep (also an Hispano associate distributor) sales as part of that move.
And Suzuki - owned by GM, but sold here under an associate company of the UK franchisee - might also be perceived as being a more efficient way of handling the relatively small sales here.
Meantime, BMW dealers across Europe are quibbling - in the courts - about an effective 2 per cent cut in their margins by the parent company under new systems brought in with the 7-Series, and promised to be continued with upcoming new models.
The court case is based on a premise that BMW will be able to regulate a recommended retail price, but the dealers won't be able to dictate a specific margin based on the wholesale price from the manufacturer.
©2003 irishcar.com