OEM ownership of dealers in agency model (UK)

[plaguedbyfoibles]

In the UK, for automotive manufacturers who have adopted an agency model, whereby they hold the stock (the cars) and sell them directly to the consumer, with the dealers being used to facilitate the handover process, are most of those dealers OEM or independently owned? How does such ownership compare to the franchise model?

Curious to know.

[csearle]

In the UK, for automotive manufacturers who have adopted an agency model, whereby they hold the stock (the cars) and sell them directly to the consumer, with the dealers being used to facilitate the handover process, are most of those dealers OEM or independently owned? How does such ownership compare to the franchise model?

Curious to know.

Hi, don't know the answer to your question, but then I don't really understand it. The term OEM as I personally understand it, is more associated with the makers of parts sold on to be installed in (often) multiple products. E.g. we used to call the wireless modules we sold "OEM versions" if they were tailored to be installed in some other firm's equipment. Clearly I'm misunderstanding something here. C.

[plaguedbyfoibles]

In the UK, for automotive manufacturers who have adopted an agency model, whereby they hold the stock (the cars) and sell them directly to the consumer, with the dealers being used to facilitate the handover process, are most of those dealers OEM or independently owned? How does such ownership compare to the franchise model?

Curious to know.

Hi, don't know the answer to your question, but then I don't really understand it. The term OEM as I personally understand it, is more associated with the makers of parts sold on to be installed in (often) multiple products. E.g. we used to call the wireless modules we sold "OEM versions" if they were tailored to be installed in some other firm's equipment. Clearly I'm misunderstanding something here. C.

In the automotive world, OEM refers to the original maker of your car.

From https://newsletter.acurabrookfield.com/ ... eric-parts :

Generic or non-OEM parts (also known as aftermarket parts) are made by anyone other than the original maker of your car.

[quelquod]

In the UK, for automotive manufacturers who have adopted an agency model, whereby they hold the stock (the cars) and sell them directly to the consumer, with the dealers being used to facilitate the handover process, are most of those dealers OEM or independently owned? How does such ownership compare to the franchise model?

Curious to know.

Hi, don't know the answer to your question, but then I don't really understand it. The term OEM as I personally understand it, is more associated with the makers of parts sold on to be installed in (often) multiple products. E.g. we used to call the wireless modules we sold "OEM versions" if they were tailored to be installed in some other firm's equipment. Clearly I'm misunderstanding something here. C.

“Original Equipment Manufacturer” is my understanding in the automotive world. So eg non-OEM for aftermarket in things like brake pads, springs, shocks etc..
Confusingly, major manufacturers often use OEM to mean “Other equipment Manufacturers” where they sell either badged or modified kit either through or incorporated into other vendors’ kit.

[mc2fool]

In the automotive world, OEM refers to the original maker of your car.

"OEM stands for “original equipment manufacturer.” Though some in the automotive industry have taken to referring to car companies themselves as OEMs, the term relates to any company that manufactures parts for use in new vehicles — or to the parts themselves."
https://www.cars.com/articles/what-is-an-oem-1420696948647/

The latter is much more the universally accepted definition, IME. As the Wikipedia entry for OEM csearle linked to above says:

"When referring to auto parts, OEM typically refers to the manufacturer of the original equipment, that is, the parts which are then subsequently assembled and installed during the construction of a new vehicle. ... For example, if Ford used Autolite spark plugs, Exide batteries, Bosch fuel injectors, and Ford's own engine blocks and heads when building a car, then car restorers and collectors consider those to be the OEM parts."

[Maroochydore]

are most of those dealers OEM or independently owned? How does such ownership compare to the franchise model?

Curious to know.

I think all dealers are independently owned otherwise they wouldn't be called dealers, would they? Perhaps franchises?

My 'local' dealer has around 10 locations across the South. I say local because he started locally -as a racehorse trainer- and now covers a stable (pun intended) of brands such as Aston Martin, Audi, Bentley, BYD, INEOS Grenadier, Jaguar, Land Rover, McLaren, Volvo and BMW.

As such I can't see how one OEM only could be involved.

[DrFfybes]

"When referring to auto parts, OEM typically refers to the manufacturer of the original equipment, that is, the parts which are then subsequently assembled and installed during the construction of a new vehicle. ... For example, if Ford used Autolite spark plugs, Exide batteries, Bosch fuel injectors, and Ford's own engine blocks and heads when building a car, then car restorers and collectors consider those to be the OEM parts."

Years ago I needed wheelbearings for the bike. I was offered Genuine Honda or 'Pattern'. I wanted the real thing so paid IIRC about 4x the price of the then UK made SKF (or perhaps NSK) equivalents.

The Honda boxes duly arrived, only for the rubber seals to be stamped with the SKY logo and part number. You pay a lot for them to be shipped to Japan, put in a box, and sent back

But yes, I grew up thinking OEM meant Genuine Honda, and Pattern was usually an inferior copy, rather than the now more usually terminology where OEM refers to the same part as originally fitted from the same people who make that part for the company that assembles the vehicle.

Paul

[mc2fool]

But yes, I grew up thinking OEM meant Genuine Honda, and Pattern was usually an inferior copy, rather than the now more usually terminology where OEM refers to the same part as originally fitted from the same people who make that part for the company that assembles the vehicle.

Well IME it's exactly the opposite. OEM has always referred to a third party company that makes parts that go into the vehicle on assembly (e.g. Exide batteries in Ford cars), and it meaning the manufacturer of the vehicle themselves is the newfangled interpretation.

[modellingman]

Trying to get back to the OP's question after the diversion into what is meant by OEM, the market shares of UK sales by dealership are not that easy to find online (in sharp contrast to shares by manufacturer/model, etc). However, this page https://www.scoosh.com/car-dealers/top- ... in-the-uk/ does list what it calls the top 100 and contains a listing by revenue. The time period is not defined but at no. 1 is Sytner Group at £6.006 bn, 2 is Lookers at £5.131 bn, 3rd is Pendragon at £4.627 bn.

I have no idea who the owners of these groups are but I doubt that they are owned by the motor manufacturers. The only names in the top 100 which have a manufacturers name are number 13, Mercedes-Benz Retail Group at £1.150 bn, number 27 Renault Retail Motor Group (£0.618 bn), number 47 BMW Retail (£0.365) bn and number 53 Porsche Retail Group (£0.304 bn).

To me this suggests that most cars in the UK are retailed through independent retail groups. The interesting questions to my mind are in the contractual relationships between those groups and the manufacturers whose products they sell. Those relationships presumably cover stock financing, sales bonuses, provision of facilities by the retailers for servicing and warranty work, sales of spares to trade and public and, a bit of a hot potato currently, the provision of retail finance.

modellingman

[the0ni0nking]

Aren't new cars likely to be treated as consignment stock? [Out of date on whether it's been superseded by some other treatment as we're a service business so my last involvement was my exams 20 years ago].

[DrFfybes]

Trying to get back to the OP's question after the diversion into what is meant by OEM, the market shares of UK sales by dealership are not that easy to find online (in sharp contrast to shares by manufacturer/model, etc). However, this page https://www.scoosh.com/car-dealers/top- ... in-the-uk/ does list what it calls the top 100 and contains a listing by revenue. The time period is not defined but at no. 1 is Sytner Group at £6.006 bn, 2 is Lookers at £5.131 bn, 3rd is Pendragon at £4.627 bn.

Intersting.

I know Vertu (no 5) bought most of Helstons (no 26) last year. Some of the names on there sell high end vehicles which could skew the numbers - Helston had a Ferrari, Audi, LR and Porsche dealer, Dick Lovett, HR Owen, and JCT600 similarly. I think Sytner group also have a couple of McLaren dealerships. Helston turned over £626m in 2021, the list says £620m

Edit to add - in at least some of those cases the dealer owns some of the stock, however some hold a mixture of manufacturer stock, their own stock (often part ex or ex dem) and in some cases hold Private vehicles on SOR.

Paul

[Howard]

In the UK, for automotive manufacturers who have adopted an agency model, whereby they hold the stock (the cars) and sell them directly to the consumer, with the dealers being used to facilitate the handover process, are most of those dealers OEM or independently owned? How does such ownership compare to the franchise model?

Curious to know.

I don't think your second question has been addressed. According to Car Dealer Magazine, only two manufacturers in the UK, Mercedes and Volvo, currently operate an agency model.

VW has just paused it's agency model.

Answering your question with a quote from the current issue of the magazine - "Stellantis, BMW and JLR have all paused their plans to move to agency sales amid growing concern in the industry that it doesn’t work."

So, at the moment the trade view is that the franchise model is better.

More details can be read at https://cardealermagazine.co.uk/publish ... les/310387

regards

Howard

PS Out of interest the edition linked has an interesting table ranking the most profitable car dealers by ebitda. Obviously this is historical data, 2024 might not be so profitable.