Critical challenges ahead for dealers’ consumer-facing role

Reflecting on the impact of Covid-19, the report notes that consumers expect a seamless experience across the channels they choose, and this should be fast, personalised, effortless and transparent. 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 is vital.

Louise Wallis, head of business management, National Franchised Dealers Association (NFDA), commented: “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. As a result, the report highlights various opportunities around electrification, mobility solutions, aftersales, and servicing, which offer dealers a way to expand their relationship with the driver. 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, explained: “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.”

Other key market dynamics include the impact of electrification; online retail and digital transformation; connected propositions; the changing shape of mobility solutions post-pandemic; as well as changes in the wholesale ecosystem.

On the back of the weakest September for new car registrations since 1998, Cox Automotive has revised its year-end forecast down to 1.63m. This is on a par with the year-end figure for 2020, also 1.63m. While supply constraints are impacting used car transactions, the market is expected to exceed the 6.75m transactions which took place in 2020. The Insight Report 2021 projection for used car transactions in 2021 now sits at 7.14m.