Changes in Car Retailing are Inevitable
As car showrooms across the UK have re-opened the volume of used car sales has been very encouraging. There has certainly been a bounce-back and Mann Island has been delighted to support dealers with record levels of business activity testament to the volumes of business being seen. This should not detract from the reality that changes in motor retailing and financing are inevitable.
In making this statement, I want to be clear that change can be a positive thing. It can help to sustain the many dealers who are prepared to adapt. With the exception of the necessary social-distancing and sanitisation requirements, COVID-19 is not the reason for change. All it has done is to accelerate the need for it. The real drivers were already in place; they have simply been brought into short sharp focus:
- Regulation – customer needs must be front and centre; they are protected and well informed;
- Social Change – people want to self-serve and control their purchasing and finances 24×7 where and when it suits them;
- Digitisation – the way customers discover and buy almost everything has moved online;
- New Business Models – online car retailing is not new; it has increased steadily over recent years for new and used car sales. Some may see this as a positive, others as a corrosive influence;
- Rising Costs – as margins have been pushed down, many have seen the cost of sales rising from people to marketing; from compliance to insurance.
The result of these changes and others has increased the pressure on the traditional dealer model; these same factors will also have impacted dealers’ supply chains. In leading Mann Island Finance, I am very aware of regulation and the need for fairness and transparency. The importance of ‘customer-centricity’ and compliance are only likely to increase and we must embrace them. Get it right and we can hope to survive and prosper.
The positive of COVID-19’s impact, harsh and difficult though it has been, is that it has created a laser-like focus on the need to change business models to meet the rapidly evolving operating landscape; this is evident across all areas of commerce.
Today, we can enjoy the moment of the current activity levels, but we must make time to consider how we transform the dealer model and that includes finance. Technology, transparency, service enhancements (including self-serve); value-in/cost-out, regulation, marketing and the developing roles of people in an increasingly digital used car market need to be on the agenda and more. Amongst those should also be collaboration; businesses need to work more closely for mutual benefit and to serve customers.
As the leader of a business centred on service, I welcome the opportunities of discussing collaboration and new ways of working talking. Let’s not wait; let’s start the dialogue now.
