Dealers must prepare for an automotive industry that will be “unrecognisable in the coming decade”.
The fourth annual Cox Automotive and Grant Thornton Automotive Insight Report highlighted the impact of electrification; digital transformation; and the possibility of the manufacturer agency model. It suggests dealers will need to rethink consumer engagement and revenue streams to remain competitive in years to come.
The report notes that consumers expect a seamless experience across the channels they choose. Vehicles must be visible through search, and it must be straightforward to connect all stages of the customer journey, including trading in a part-ex and arranging funding. To create this seamless end-to-end experience, the report suggests that connecting data and touchpoints are vital.
Louise Wallis, Head of Business Management, NFDA, said: “In the most recent NFDA Dealer Attitude Survey, it was positive to see dealer satisfaction levels with their manufacturers improved. There are certainly reasons to be optimistic, although caution is still recommended as we head into winter and the uncertainty of how this will impact trading conditions. As the sector moves towards a more digital, connected, and electrified future, significant investment will be required by dealers to ensure they are ready to take advantage.”
However, the report also affirms a large proportion of car buyers are still looking to complete their next transaction in a dealership, while, in various markets, legislation makes the direct-to-consumer model very difficult.
While still making up a relatively small proportion of the total, the report also notes that online used car sales are likely to double in the next five years.
Philip Nothard, Insight and Strategy Director at Cox Automotive, added: “With direct-to-consumer models on the horizon for many manufacturers, there is an opportunity for dealers to keep their relationship with drivers through education and information centres. How these evolve to generate both footfall and also drive sales opportunities, even if those are via the manufacturer website, will be interesting to see. The importance of the dealer in helping consumers with the transition to electric should not be underestimated.”