A bright future for those with the right business model

Brands are facing huge challenges when it comes to balancing future investment and maintaining existing operations. In reality, manufacturing a vehicle is only 40% of the total cost of bringing a vehicle to market and with brands already making significant strides to consolidate National Sales Companies (NSCs) it is clear retailers will come under scrutiny to drive greater efficiencies.

Giving dealers approximately 15% of the value of the vehicle to use for discounting is one obvious reason why the agency model has become so attractive to brands. It will reduce the amount given to retailers to 3% of the value and it will impact balance sheets, but for well-run businesses this change will be perfectly manageable.

Marshall Motor Holdings Plc (LON:MMH), together with its subsidiaries, engages in retailing passenger cars and commercial vehicles in the United Kingdom. It sells new and used vehicles; and provides after sales services, such as servicing, body shop repairs, and parts sales.

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