As a company, GForces is in no doubt that the automotive retail market is changing. And, as an automotive specialist with over a decade of experience in interpreting market trends and seizing the opportunities they represent for dealers, I think it’s more than the market that’s changing. How we buy and sell cars is changing too. Even the cars we buy are changing. Actually, let’s just say it’s all change as far as the industry’s future is concerned.
Dieselgate. Shared ownership models. Cars packed with complex technologies. Legislation. None of these things are making the life of the average independent retailer easier. Let’s look at the reasons why.
From providing a 24/7 digital dealership to opening up stock availability to a nationwide market, technology is helping us level the playing field, not restricting it.
The consumer is being told that diesel is of the devil. Fuel costs have been hiked up, and duty is likely to follow suit. Add in a heavy mix of social pressure based on environmental concern, expectation, responsibility and peer pressure, and it’s no wonder that residuals of diesels are plummeting and being ignored by dealer and consumer alike. And that removes a huge swathe of available vehicles from dealers. It doesn’t matter that a small increase in vehicle tax is considerably cheaper than a never-ending PCP monthly, or that manufacturers like Mazda are developing cleaner and better diesel engines. Or even that diesel is still probably the cheapest and most efficient way of powering a vehicle. Perception, unfortunately, is a more powerful persuasion tool than professional advice.
Shared mobility or ownership models are also going to impact us too over the next decade too. Whereas in markets like Asia, demand for vehicles will outstrip shared mobility, here, we could see it adopted much quicker. And whereas that might be great for those retailers sourcing from post-contract leasing stock, it will again limit the choice available for smaller operators and specialists.
The new technologies being integrated into today’s vehicles will probably impact the consumer before retailers, but again, there will be a knock-on effect. It’s not unfathomable to suggest that consumers in the used market are likely to avoid models that come with expensive maintenance costs. When you need a degree in engineering to fit a headlight bulb (or pay a manufacturer-trained technician to do it), or when replacing a wing-mirror also means replacing active radar sensors and a parking camera result in a bill north of £500, those vehicles are going to quickly lose appeal in a used market dominated by budget.
Over 32% of GForces clients are independents. Independents are a force to be reckoned with and have significant market share. They are often the most community-based of retailers, and they earn the loyalty of their customers as a result.
As I’ve already mentioned, legislation is also going to impact ownership. Vehicle tax currently targets emissions. We can probably expect other green factors like recyclability, engine size and efficiency, and perhaps even economic factors like price banding to drive new restrictions in the future though. This again will influence consumers and the choices they make vehicle wise.
So, do dealers need to start stocking micro-vehicles made out of recycled plastic, compatible with evolving technology but not loaded down by it? Well, that’s possibly one way to go. But, actually, reality is probably a little more level-headed. Over 32% of GForces clients are independents. Independents are a force to be reckoned with and have significant market share. They are often the most community-based of retailers, and they earn the loyalty of their customers as a result. Premium and performance vehicles will always be in demand, and if they become slightly more undesirable due to market forces, all we’ll see is the price go down and their availability increase for those to whom they were initially out of reach.
Also, independents are just as capable of moving with the times as the rest of the market. We’ve already seen an independent retailer adopt our end-to-end ecommerce platform as a direct result of consumer demand. From providing a 24/7 digital dealership to opening up stock availability to a nationwide market, technology is helping us level the playing field, not restricting it.
In short, independent dealers are probably better equipped than any to adapt quickly to consumer demands, and the forces impacting new car sales create as many opportunities as they do threats. You just have to have the right insights and understanding of the market in order to act.
Sales Director, GForces