Carmakers Slowly Selling Off Their Dealerships in Europe

European carmakers are trying to sell their company-owned dealerships to private investors, notes Automotive News Europe.

Manufacturers own roughly 3% of the 47,500 dealerships in western Europe. But carmakers are eager to shed such operations because they generate profit margins of only 2%-5% and dilute the profitability of privately held outlets, according to the online newspaper.

ANE cites data from U.K. retail analyst ICDP showing that Volkswagen Group owns the most dealerships (nearly 600) among manufacturers, the bulk of which it acquired when it bought Porsche AG in 2012.

ICDP says manufacturer ownership of dealerships is "largely a quirk of history." It adds that labor union agreements can make it difficult to shed such operations, especially in France.