Car dealers rehearse the rebellion

Car dealers rehearse the rebellion

This is remarkable in that the comparison bar from the previous year was actually already low. After all, 2020 was a real crisis year. It is now less the pandemic that is causing problems for the market than the semiconductor shortage and the associated delivery difficulties for car manufacturers.

Of course, these are still making billions in profits, especially since prices are higher than ever and ruinous discount channels have come to an abrupt end. Small traders, however, are suffering. You sometimes have to tell customers that they won't be able to get the vehicles they want for another year. At the same time, they run the risk of missing the set annual targets, which means salespeople receive less commission and the job becomes less attractive. The consequence: “The shortage of skilled workers has also affected our industry,” as federal committee lobby Klaus Edelsbrunner says. He often misses the lack of support from manufacturers.

Pressure from all sides

Yes, some people are putting additional pressure on their dealers, for example with new sales models such as direct sales. Politicians, in turn, are turning the tax screw and pushing for electric cars, which private customers don't want yet, not least because of the lack of charging infrastructure. More than 80 percent of all electric cars sold in 2021 were company cars. 

All of these trends, the electric car, rising taxes, the Covid pandemic and the chip shortage, will also be with us in 2022. Experts are sure of that. But something else is emerging that could well become a trend: retailers are defending themselves against seemingly overpowering corporations. 

Next judgment against a manufacturer

The Frankfurt regional court has upheld a lawsuit brought by the Association of German Opel Dealers (VDOH) against Opel. The issue was against Opel's “Commercial Policy”, which also regulates the remuneration system for Opel authorized dealers. As it is said, the association sued on behalf of its members against the general design of the remuneration system, its incalculability and, above all, against the numerous unilateral options for changes, including interference with the margin. 

The Frankfurt regional court is now showing Opel its limits in the dispute over dealer remuneration. The conclusion is that a compensation system designed for unilateral changes is unfair and disadvantages retailers. Opel must refrain from “changing the remuneration of affiliated Opel dealers in the form of basic margins and/or bonuses for new Opel vehicles annually through circulars (…) (…),” the judges wrote in their judgment. 

It will be exciting to see what happens next. Whether Opel wants to continue fighting the case in court or whether they might still reach an amicable agreement?

In any case, the cause is reminiscent of the Büchl case in Austria. As a reminder: Last year, the Upper Austrian Peugeot dealer Büchl was upheld by the Supreme Court in a long-standing legal dispute against Peugeot Austria (PSA). The assessment remained that Peugeot had abused its market power over dealers for years. 

live and let live 

Economic dependencies exist in many countries, including such large markets as France and Germany. They stand in the way of free, fair competition. Smaller traders who are in a relationship of dependency usually do not dare to take their powerful contractual partners to court. But maybe there will be movement now. It is quite possible that the two Büchl and VDOH cases, which received a lot of international attention, will now encourage other retailers to take action against supposedly unfair business practices in the relationship between manufacturers and retailers. In the end there should be a real partnership (again). One in which everyone pulls together, true to the motto “live and let live”. Because there are enough challenges and disruptions, even downright hostility (somewhat from politicians), anyway.