The past year has been an extraordinary one with dealers having to adapt to a rapidly changing market.
Cazoo has spent the year sponsoring major sports events to build its brand in the UK and Europe, buying in logistics, refurbishment, fleet and leasing services to ramp up sales. It is joined by cinch (owned by Constellation which also owns BCA and webuyanycar) which has ambitious plans for the group. Who was expecting Constellation to bid for Marshall Motors, which itself had just bought Motorline?
It was also a year that saw supplies of new vehicles hammered by the shortage of semi-conductors across the globe. This is well chronicled. Carmakers slowed chip orders when the pandemic started. With huge numbers of people working from home there was massive demand for chips from other sectors and OEMs had to join the queue to get their quota. The consensus is that supplies will not start to come back to normal until mid 2022.
It was the year of the used car. A slowdown in sales of new cars in recent year has meant a decline in the used vehicle parc. The relatively small number of new cars sold in 2020 and 2021 is having an impact on the used cars with nearly new cars rocketing in value, and cars down the food chain showing big rises. Dealer profitability on used cars in a rising market has been tremendous. Again, the consensus is that there is unlikely to be a sharp correction in the market in 2022 and any correction will not happen until the new car supply is righted.
This year was also the year that saw a tipping point in sales of electric vehicles (from a low base). Year-to-date, 1,538,585 new cars have been registered, of which 17.5% have been BEVs or PHEVs. When combined with hybrid electric vehicles, a quarter of the new car market during 2021 has been electrified. The NFDA is pushing ahead with its EVA scheme to get dealers accredited to sell EVs.
And it is a year of rapid change for digital. The pandemic acted as a catalyst to drive dealers and suppliers to offer more digital services to keep closer to customers with showrooms closed. It continued in 2021 with dealers adapting an increasingly multi-channel approach to selling new and used cars.
And in 2021 the agency model was in the headlines. It is being contemplated in different forms by carmakers, especially for electric vehicles. But there is a lot of work to be done here to get the formula right for carmakers, dealers and customers.
Finally, thanks to everyone who entered the Motor Trader Awards in 2021 and congratulations to the highly commended and winners. What was clear from the entries was how dealers have adapted and changed their game to get closer to consumers in difficult times.
Wishing you a Merry Christmas and a Happy New Year.T