3:48 pm, July 8, 2020
Some 500 franchised car dealers could shut their doors for good as restructuring and the coronavirus pandemic take their toll on the car industry.
That’s the view of Marshall Motor Group chief executive Daksh Gupta who told Car Dealer Magazine – in an exclusive interview you can see a clip of above – that he believes there will be a 25 per cent reduction in dealer numbers by 2025.
Gupta said that manufacturers restructuring their networks – such as Ford, Vauxhall and Honda – as well as dealer groups realising that they can do business very differently will accelerate the closures.
‘There’s 4,500 retailers in the UK and I could see that dropping to about 4,000 maybe in the next 12 months,’ said Gupta.
‘Most people think, and I concur with this view, that by 2025 there will be fewer retailers.
‘There is subjectivity as to what that number will be, but in my own mind I have always thought we’ll see a reduction between 20 and 25 per cent naturally by 2025.’
Gupta said car dealer groups have realised that they can now do business very differently following the pandemic – and this will mean changes to dealer numbers.
‘You also have the dynamic created by lockdown as people are looking at the model and realising there are some efficiencies that can be driven,’ said Gupta.
‘Productivity is significantly higher with less people and some groups are taking advantage of that.’
Gupta said Covid-19 had ‘accelerated’ decisions by dealers to make closures and thinks they’ll be a lot of ‘smaller businesses’ that will close.
He added: ‘15-20 per cent will happen in the next 12 months. There’s a lot of momentum on this.’
Gupta added that some of these changes would also result in job losses and says ‘market intelligence’ leads him to think ‘every dealer group is taking actions’.
The full interview with Daksh Gupta will be published exclusively in the next digital issue of Car Dealer Magazine which is out later this month
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