What does the future look like for the small main car dealer?

Advocates say the new model frees dealers of the responsibility of paying for stock and that, for customers, it creates a level playing field between dealers in terms of new vehicle pricing. Critics argue that it threatens the delicate relationship between dealer and manufacturer, and that manufacturers are ill-equipped to sell cars, a job they say is best left to dealers. How will small independent dealers, those perhaps least able to withstand big business shocks, fare in this brave new sales agency world?

In fact, Jim Saker, president of the IMI, believes the agency model could be the saviour of independent dealers. "It's a bit of a win for them. It takes new car stock off their balance sheets, enabling them to borrow money for other things such as investing in premises, people and brand standards. If they can leverage the value chain effectively, they should achieve a higher return on sales, too.

"Also, quality of staff is vital to an agency model in which customer experience is everything. Here, small dealers could have an advantage over larger ones because their customer care is already often much better, while being embedded in the local community means they're a familiar and trusted face."

Mike Jones, an automotive consultant, agrees. "People are willing to pay for good customer service and small dealers are best placed to deliver it, where big groups can struggle. Staff in small dealerships tend to stay for longer, too, and become familiar faces to the extent that if the brand or, in this case, the business model changes, the customers remain. And don't forget that in many cases, owners of these small dealerships own their land and premises outright and so can afford to change their business model to suit whatever card they are dealt."

The arrival of the agency model is not such bad news after all, then, except that not all manufacturers are persuaded. Kia and Suzuki are two that have announced they're happy with things as they are.

Interestingly, both have grown on the shoulders of smaller, independent dealers, many of whom have represented them for decades. Certainly, Kia, whose market share just keeps growing and which now stands at around 5.5% (around 92,000 sales annually), has little to complain about.

At the other extreme, Suzuki has a 1.5% market share with annual sales of 35,000 but Dale Wyatt, the company's director of automobile, insists this position suits the brand's business model perfectly. "Annual sales of more than 50,000 is the tipping point when a brand's focus shifts more to distribution and processes, and away from its dealers. How you deliver these business needs without alienating your dealers is critical. Agency would be a distraction; we could waste two years on it. It puts dealers last when my aim is to put them first."

Suzuki has 150 dealers in its network, around 100 of them individually owned, mostly by families. "I value the speed of decision making within smaller dealers and the close relationships we have with them," says Wyatt. "They're very stable, although the risk is that family problems – a mid-life crisis or a fall-out – can derail them.

“On the other hand, each one is a reflection of its owner and as a result the businesses each have a unique personality, a fact that resonates with our aim to be the trusted brand for those who are proud to be different. When you are a sub-1.5% brand you have to differentiate yourself and we do this through our dealer and customer relationships. "

It seems that at least within Suzuki's ranks, the future of the small, independent franchise dealer is assured.

The dealer

"If I want to paint the showroom pink this afternoon, I can," says Stephen Ody, co-founder and managing director of Tracks Suzuki of Exeter (he also has a branch in Taunton). He's joking, I hope, but his point is that being the owner of an independent business gives him the freedom to make decisions that in other circumstances might have to be discussed with a board.

Ody started Tracks 30 years ago with two people and £65,000 from mortgaging his house. Today, he sells around 500 new Suzukis across his two branches each year and last year his business was crowned Suzuki dealer of the year. "Suzuki is a friendly company and easy to do business with," he says. "They're realistic about what a business like ours can achieve. We don't have anyone demanding we build a multi-million pound showroom."