7:07 am, March 14, 2023
Close Brothers Motor Finance has produced a special report examining the future outlook for alternative fuel vehicles (AFVs).
Seán Kemple, the firm’s UK and Ireland CEO, unveiled the exclusive research at our Car Dealer Live conference, sponsored by Auto Trader, which took place last Thursday (March 9) at the British Motor Museum in Gaydon.
He told host James Batchelor that Close Brothers believes the upcoming wave of new Chinese EVs is likely to reduce the cost of buying a new electric vehicle in the coming years.
Kemple also told the conference delegates that data collected in January showed that dealers who had already transitioned to selling AFVs had experienced significantly higher demand than retailers who were still only selling ICE cars.
Close Brothers’ exclusive research paper prepared for Car Dealer Live is now available to download for anyone here.
If you’d like to watch back the session on video, and the rest of the day’s interviews, you can do so with a Watch Online ticket that will allow you to replay the whole event.
Kemple told the Car Dealer Live audience: ‘We saw a big volume of AFVs coming through in 2022 and they’re going to hit the used car forecourts in the next couple of years.
‘There was a significant increase in battery-electric vehicles. Sixty-two per cent of dealers say that AFVs are more popular than petrol or diesel when they stock them, and you can see that demand right up there for AFVs.
‘Then you’ve got 66 per cent selling more AFVs than they were previously. Profitability is a key thing there as well. Because that demand has been so high, the profit has been higher on used AFVs than it has been on petrol and diesel.
Kemple also said that a survey conducted as part of the White Paper found that just nine per cent of dealers didn’t ever see themselves selling AFVs.
However, automotive industry professionals in the audience didn’t think that the government’s 2030 ban on new ICE vehicles was realistic.
Overall, 66 per cent of respondents didn’t think the ban would be implemented in line with its current timetable.
The survey says… NO! 66% of people don’t think the current target is achievable #CDLive https://t.co/QmJytyFxl5
— Car Dealer Mag (@CarDealerMag) March 9, 2023
Customers changing for a decade
Among the main topics discussed by Kemple was how the job of a dealer has changed in recent years.
Along with the rise of AFVs has come an increased reliance on data, which has fundamentally changed how the industry works.
Kemple told the audience: ‘For me, I suppose the customer is king and has been for quite some time.
‘Dealers have become more and more in tune to using data and insight and the information around them, certainly more than what we saw a number of years ago.
‘Dealers are starting to adapt to that based on what they are seeing coming through from EVs.
‘Obviously, we are also seeing a huge amount of new vehicles coming through. There is a lot of energy going in from OEMs and that has that trickle-down effect across into the used market as well.
‘There is a lot of noise around AFVs at the moment and I think that goes back to how the dealer can play a role in supporting consumer transition to those vehicles.’
He added: ‘The consumer has been changing for well over a decade now, probably for 15 years easily at this point, and dealers have had to react to that.
‘I’m old enough to remember the time when you would get Auto Trader on a Thursday, circling those vehicles and going out on a Saturday to see the cars.
‘By halfway through the day you’re just bored of it. The internet came along and changed that. Then mobile came along.
‘The consumer is using desktop, they’re using desktop and mobile. That has taken a while for that shift to happen, but that transition has been really, really important.
‘We heard earlier how Covid shifted things by 10 years in 10 months and I completely agree with that, but I also think the consumer was already there.
‘Being able to adapt to that now, realise that, acknowledge it and use that information is incredibly beneficial for dealers.’
You can download the full Close Brothers Lead the charge with alternative fuel vehicles White Paper here. To watch back the full video of the session purchase a watch online ticket here.
