National Franchised Dealers Association chief executive Sue Robinson talks to Automotive Management about how the balance between dealerships and manufacturers is changing, why EV policy still needs to reconnect with consumer demand and what will separate the dealers that thrive in 2027 from those that struggle.
Looking back across 2026, what do you think has genuinely changed for franchised dealers, rather than simply become another short term challenge they have had to absorb?
I think the big change has probably been the new entrants coming into the market. It’s very visible now. At our regional meetings with medium and smaller dealers a lot of them have taken on new entrants, while others are interested in what is out there. Historically, having worked through all the Block Exemption discussions over the years, dealers were tied fairly closely to a manufacturer. Regardless of what that manufacturer said or did, they didn’t necessarily have anywhere else to look or go.
Now, if their current brand is making life difficult, there are alternatives. Dealers themselves might not necessarily identify that as a major change, but looking at it objectively, I think it represents quite a shift.
Alongside that, there are all the operational costs which is probably much nearer the top of the priority list because it affects the day-to-day running of the business. Energy costs, employment costs and all those practical issues still have to be dealt with.
The latest NFDA Dealer Attitude Survey showed improved manufacturer-dealer sentiment, but profitability, return on capital and EV targets remained concerns. Are relationships genuinely improving?
It comes down very much to which manufacturer they have, the commercial proposition and whether the retailer feels it is being treated as a genuine business partner. We’ve just sent out the latest Dealer Attitude Survey, so it will be interesting to see what comes back this time. But there are some fairly basic characteristics that determine whether the relationship works.
Profitability is important – it always will be – and so is the support retailers receive from their manufacturer. Ultimately, it also comes down to how your manufacturer treats you. I go back to Block Exemption because we used to talk a lot about creating a balanced relationship between manufacturers and dealers. Sometimes that relationship perhaps wasn’t quite as balanced as everybody was led to believe.
The ZEV Mandate has arguably become one of the defining issues for dealerships in 2026. What are dealers telling you about the gap between the targets and genuine retail demand?
Our thinking is much closer to a 50% zero-emission car target by 2030 and we’ve been going around the country speaking to dealers because I want to make absolutely sure that when we submit our position, it properly represents what dealers are saying – from the large groups through to medium and smaller businesses.
What we are hearing is that the existing trajectory simply isn’t realistic but it isn’t only about changing a percentage. There is the whole practical question of whether consumers are actually going to buy the cars.
Manufacturers are in very different positions as well. You can have one retailer whose manufacturer is doing reasonably well against the targets and another retailer whose manufacturer is in a completely different position. Ultimately, you have to have retail customers walking into dealerships and actually buying electric cars. Regulation on its own cannot create that demand.
For consumers there are still questions around charging and cost and government policy hasn’t always helped. At times, it feels as though something is being encouraged with one hand and then an incentive is taken away with the other. That lack of consistency makes the transition more difficult. Dealers need customers to have confidence in what they are buying and confidence in the direction of policy.
When you meet with dealer group leaders and dealer principals at Automotive Management Live on November 11, what will you be telling them to concentrate on?
Things are moving incredibly quickly so dealers have to keep looking at their costs, their relationship with their manufacturer and where that manufacturer is heading. I would also say they need to be very aware of what is happening around motor finance and the FCA. We’re living in a very litigious and highly regulated world, and it is incredibly important that dealers get the correct advice.
We have occasionally had dealers come to us having taken advice that simply wasn’t right – it might have been hearsay or somebody’s interpretation. That creates exposure. We work closely with the FCA and the Financial Ombudsman Service, and we have their heads of finance and compliance sitting on our F&I working group and they are helping us develop guidance that can then support the wider NFDA membership.
Large dealer groups may have compliance directors and F&I directors, but not every dealership has those resources internally. It is important that everybody has access to good guidance.
Motor finance has obviously been a major issue for NFDA. Going to the Supreme Court was a very significant decision for us and there was a lot of soul-searching over whether we should do it and we spoke to dealers before making that decision. But I think the benefits to dealers from the outcome have been enormous. Had we not been involved, the industry could have been in a very different place. That is what a trade association should be doing: trying to make a genuine difference for its members.
Absolutely, and in recognition of that we presented you with the AM Award for Business Leader of the Year, which we were delighted to do. Looking further ahead, the NFDA’s Driving Automotive conference in December will focus on new brand entrants. What should dealers examine before signing with one?
First of all, get legal advice. Most established dealers are already pretty clued up because they have signed franchise agreements with European, Japanese or Korean brands in the past. Dealers should examine what demands the manufacturer is placing on them, whether the brand suits their particular catchment area and look beyond what the opportunity looks like today.
When some of the Korean brands originally entered the UK they were new names before developing into very established manufacturers. Some of today’s new entrants could follow a similar path, but the marketplace is changing very quickly and there are things – tariffs are one example – where nobody can say with certainty what will happen. You can only work with the information you have today, but a good legal team can help make sure the agreement also considers how circumstances might change.
Finally, in 2027 what will separate the dealerships that thrive from those that find the market increasingly difficult?
We know that for the dealer groups that are thriving at the moment, it is very much down to the brands they have and the relationships they have built with those manufacturers. Another retailer may be representing a manufacturer without the right EV product or which is finding the transition more difficult, and that dealer has to consider what its future looks like.
But fundamentally it still comes back to profitability. It is about running a business. Dealers have to look at all the costs within that business – National Insurance, minimum wage, energy and everything else that is increasing. Those things may sound less dramatic than some of the big structural changes taking place in automotive retail, but they ultimately determine whether the business works.
There are more opportunities and arguably more choices available to retailers now than ever before but dealers still have to decide what good looks like for their own business – and make sure the numbers work.
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