CDL 2024

Agency, electrification and cost-efficiency among biggest dealer concerns for 2024 – ATG

  • Automotive Transformation Group gives its thoughts on troubles facing the motor trade this year
  • Firm identifies five key areas of concern including agency and electrification
  • CEO Tim Smith also gives thoughts on how AI can impact the automotive industry
  • Firm has published a special white paper and appeared on stage at Car Dealer Live 2024

Time 7:28 am, March 20, 2024

Agency sales, electrification and cost-efficiency are among car dealers’ biggest concerns for the year ahead.

That is according to Automotive Transformation Group’s (ATG) enlightening white paper session at Car Dealer Live 2024.

The company used the conference, hosted at the British Motor Museum, to publish its thoughts on the biggest challenges facing retailers in 2024.

Car Dealer’s James Batchelor was joined on stage for the session by ATG’s CEO, Tim Smith, as well as Ben Athow, head of marketing and digital transformation at Norton Way Motors.

The trio enjoyed a fascinating chat about what dealers will be facing up to in the coming months and how they can navigate some of the industry’s biggest challenges.

In its paper – titled ‘Cruising through industry challenges: a blueprint for omnichannel success in 2024’ – ATG identified five key concerns for dealers.

They were ‘agency’, ‘evolving compliance pressures’, ‘electrification’, ‘consolidation and consumer demand’, and ‘cost and operational efficiency’.

On agency, ATG’s research found that while there was ‘evidently headwinds in terms of rolling out agency’, brands that have adopted the model saw their market share drop in Germany.

The paper points to the example of Mercedes, which saw its share of the UK market drop to 3.8% in the opening month of 2023, compared with 5.5% over the same period in 2022. The brand’s sales also reduced by 20% year-on-year.

Meanwhile, during the same period other key players that hadn’t implemented the new sales model were reporting market shares of 5.9% (BMW) and 6.8% (Audi).

When it came to electrification, ATG noted that the majority of the 2,000 dealers it surveyed mentioned the issue as a point of concern in 2024.

However, the firm’s experts believe that while the challenge is ‘noteworthy’, retailers will see fleet and local business sales compensate for a potential lack of private consumer appetite.

Smith said: ‘There are things you can control and there are things you can’t control and I think for us it’s about looking at anything that we can hopefully have an impact on.

‘I just think operational costs is really about making your business – your dealership – work as effectively as possible.

‘It’s about putting individuals, resource, your capital to its absolute best use in terms of its yield, its return and its profitability.’

Read all the headlines from Car Dealer Live 2024

As well as outlining the biggest issues, ATG’s white paper also provided a blueprint on how dealers can continue to achieve success.

The main theme of the research was how outfits can use an omnichannel approach in order to remain profitable.

The paper identified six ways that dealers can improve efficiency and drive sales, including improving lead management and utilising AI within their businesses.

On the subject of AI – a hot topic within the motor trade at the moment – ATG said the technology could be a ‘game-changer’ for the automotive industry.

The firm said that as long as dealers are able to find the right technology partner, AI could be used to complete time-consuming tasks, which usually take dealers away from maintaining relationships and selling.

The study goes on to say that the right AI partner has a wide range of capabilities and an in-depth understanding of the vehicle sales process from the perspective of all parties, as well as a tangible roadmap of AI implementation.

They should already be demonstrating practical AI-driven tools that have proved to boost efficiency and automate manual-intensive tasks.

Speaking about AI, Smith added: ‘It’s a lot of hype. It promises an enormous amount but if we sort of pick it back a bit you’ve got two far ends of the spectrum in terms of what AI is going to deliver to the world.

‘Either it’s a total utopia, where none of us have to work ever again and machines do everything, versus Terminator end-of-days Armageddon.

‘Now, probably, as with all things, technology is somewhere in the middle.

‘This is a process and I think from an industry perspective, and certainly the way that ATG approach this model, is we look at whether we can use the tools internally to improve the way that we work.

‘We develop a lot of code, we’ve been applying tools, machine learning, copiloting where we have some AI, sort of almost sitting over the shoulder of our developers, improving the speed and the quality that they can output.

‘Now, that’s an internal piece of tech that we use within our business and that’s for us the first stage.

‘There’s actually a bit of that being delivered into the motor trade currently. It’s machine-learning this sort of scripting, this basic automation, if you like.

‘But we are starting to see AI – true AI – come into some of these tool sets.’

You can read the report in full by clicking here

Want to watch what went on at Car Dealer Live 2024? Replay tickets are available via the Car Dealer Live website.

Jack Williams's avatar

Jack joined the Car Dealer team in 2021 as a staff writer. He previously worked as a national newspaper journalist for BNPS Press Agency. He has provided news and motoring stories for a number of national publications including The Sun, The Times and The Daily Mirror.

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