Supermarkets to Steal Sales from Car Dealers

A new survey by Accenture predicts that traditional car dealerships in Europe could see dominance of new auto sales cut by 53 percent by the end of the decade, according to a report in The Financial Times. A European law that allowed sales of new cars through authorized dealers is due to end this year. It is expected that supermarket chains and other retailers will move into the market at that time.

The survey of manufacturers, suppliers and dealers concludes that new retail formats would soon rival the existing dealer model. "Those surveyed said that by 2010, market share and profit margin from traditional formats would decrease, resulting in 40 percent less net profit," according to the study.

"Retail brands such as Tesco and Sainsbury's [are] already making forays into the automotive industry by offering car insurance and even vehicle sales," according to Tim Gilchrist, UK automotive partner at Accenture.

Moderator Comment: Does it make sense for food retailers to get into the car sales business?

Wal-Mart is testing pre-owned (used in English) vehicle sales on its lots through a leasing arrangement. Shouldn't be long before we see retailers getting into the new car sales business here also. You can already purchase new vehicles through buying clubs at BJ's and elsewhere. [George Anderson - Moderator]

• Car Dealerships 'Will Lose Sales to Supermarkets' - Financial Times/FT.com