We are just finalising our rankings of the Top 300 dealer groups in Europe for the 2023 financial year.
That might sound like we’re a bit slow off the mark, but the further you go down the rankings, the more you are dependent on company filings that can be many months beyond the year end, and some estimates to fill gaps in the data for KPIs like sales volumes.
In reality, that doesn’t matter as the interesting thing is the trends year-on-year rather than the position at a particular point in time.
The Top 300 handle total sales that are about one third of the total sales volume across extended Europe, but this understates their importance as the total sales volume includes direct fleet deals and markets in which none or few of the Top 300 are active.
If you are a new manufacturer looking to establish a sales network, or a consumables service or technology provider trying to identify the key account targets in Europe, then this is the target list.
However, they are not a homogenous group. They range in size from under €300m annual turnover to €17bn. They represent anything from 2 to 49 brands, operating through 3 to over 1,000 franchise points.
Turnover, brand count and franchise points are all up by around 10% each in 2023 vs 2022. Given that this is comparing a year still affected by the pandemic-driven shortages and peak profitability with a year when generally things were returning to normal, this picture of growth was probably not also reflected in profitability, but it is still an impressive picture.
The geographical make-up of the Top 300 groups shows fairly significant change. The majority of groups remain headquartered in the same five markets – France, Germany, Italy, Netherlands and the UK, but together these groups now represent only 71% of the total rankings, down a full 10% points from the 2022 ranking.
Within this, French and German groups have both increased their representation slightly, the Dutch and Italians have fallen back slightly, but the big change affects UK-headquartered groups who made up 70 of the Top 300 in 2022, but are down to 62 in 2023.
This is not the result of the high profile acquisitions of leading UK groups by North American investors (which only really took effect in 2024), but a number of smaller UK groups with turnover under €300m being displaced in 2023 by groups from other markets.
Some of this is due to adverse exchange rate movements as the ranking is produced in Euros, but the pace of consolidation has also been greater in some other European markets who it could be considered are playing ‘catch-up’ whilst the pace has perhaps slowed (at least relatively speaking) compared to what we continue to see in other markets.
In respect of scope, the proportion of Top 300 members operating cross-border has increased slightly from 9.7% to 10.3% and those who act as importers as well as retailers has grown from 6.0% to 7.3%. These are both long-term trends rather than just a random year-on-year change.
The full details of the Top 300 will be revealed later this month, but it is fair to ask whether any of this really matters? Given the interest that we get from companies wanting to purchase the Top 300 rankings each year, then it seems that the market says ‘yes’.
And from our point of view, setting aside the commercial angle, we would agree. You can be a busy fool, trying to build a distribution or customer network – whether that is for cars, tyres, services or software – by signing up a lot of individual dealers or small groups.
That takes a lot more effort but offers far less potential revenue than signing up a smaller number of groups who might offer tens or even hundreds of outlets with a single contract. If your objective is to build scale quickly, then you must focus your efforts on the larger groups.
Moreover, in our ICDP research, we have found that the larger groups are tending towards a more structured management model with the old ‘holding company’ structure largely a thing of the past.
Groups may not always be the top groups in manufacturer league tables, but you will rarely find a dealership owned by a large group that sits in the bottom half of the league table.
This means that if you reach an agreement with such a group to represent your brand, take your product or implement your software, then there is likely to be serious commitment and a willingness to allocate the resources to make the venture a success.
This is not to say that single owner-operator dealers cannot be good prospects, but the cost of acquisition versus the potential returns will never be as attractive as for larger groups.
Effective outcomes are not the result of a scattergun approach that might take less effort to get some early wins, but about understanding what it takes to win over the most attractive targets, and then putting in the effort – sometimes over a protracted time – to reach the decision makers and make a compelling pitch. That’s when the hard work begins of delivering, working with a demanding partner to produce mutually beneficial outcomes.
Steve Young is managing director of ICDP