‘D’Ieteren’s super-dealers to collapse under pressure’
According to financial newspaper De Tijd, some of D’Ieteren’s ‘super-dealers’ for the VW group are collapsing under the pressure from above. D’Ieteren, Belgium’s largest car importer selling one car out of five in the country, is pushing its major dealers to become ‘super-dealers’ by taking over as much smaller competitors as possible.
However, not all the ‘chosen’ super-dealers have the means or the managing skills to do so. Several had to throw in the towel already, like Buslot in Dendermonde who initially took over his competitor in Lokeren, but sold his business last week to Mertens in Sint-Niklaas.
Hostile to new owner
“Normally, for taking over one garage you need three years of blood, sweat and tears”, one of the dealers says. “Taking over four competitors isn’t that easy. A good car mechanic isn’t necessary a good manager of multiple garages.” The human aspect tends to be the most difficult. “The staff is often hostile to the new owner.”
The later is confirmed by 34-year old Dominique Desrumaux, a former D’Ieteren employee and owner of the Mertens super-dealership. He says “the most difficult part in the mergers is to convince people and create the right mindset”. He had to invest some 11 million euro for the three outlets of this ‘super-dealership’.
New contract in November
Volkswagen is renewing its collaboration with dealerships in all of Europe and will offer them by the end of November a new contract. After years of discussions and being opposed to it for many years, D’Ieteren has installed end of 2017 a dealer association in Belgium, named ‘Amicale’. It is composed of 22 bigger dealers, indicated by the importer as ‘market area leaders’.
In Belgium the VW group used to have 171 individual dealers, but D’Ieteren announced it wanted to consolidate by 2020 the dealer network into 25 networked ‘super-dealers’.
By combining dealerships, D’Ieteren wants to push up profitability of the dealerships by scale, by sharing one HR, marketing or ICT service for different garages, for instance, while keeping the number of sales outlets.
In some areas very ambitious super-dealers have emerged like in Limburg, where Delorge tripled its size after Coox from Lanaken had to pass, by buying nearly all VW dealerships in the province. MIG Motors in Evergem is calculating to nearly multiply its turnover by ten – from 22 to 200 million by taking over dealerships in the Ghent area.
Dealers that are not willing to go along with the new D’Ieteren policy are put under pressure or loose their contract, although D’Ieteren itself denies the latter. The kind of investments needed are often a difficult hurdle to take for dealerships that mostly are family-owned in Belgium.
The owners of the Antwerp garage, Rietje, appointed as ‘super-dealer’ decided to throw the towel in too, mainly because of health considerations. D’Ieteren saw an opportunity and bought the business itself to strengthen its presence in the Antwerp-Mechelen-Brussels axis, the most important business axis in Flanders.
In July, D’Ieteren bought two companies in the Brussels’ area, on the one hand Bruynseels Robert (the VW/Audi dealer), and on the other hand the smaller body repair shop Bruynseels-Desmet.
Buying its own sales network
With the Thuy and Don Bosco dealerships in Halle to be taken over soon, Auto Natie in Antwerp, ACM in Mechelen, the D’Ieteren Car Centers in Brussels and most recently the Bourgoo Audi/Bentley dealership in Knokke-Heist, D’Ieteren is more and more investing in its own outlets.
Everybody expects the number of VW super-dealers to further decline in the future and according to De Tijd lot of current dealers fear D’Ieteren’s intention is to run its own sales network. Starting next year, clients will be able to buy their cars online while their new VW will benefit from cloud updates and dealer network communication.