Dealers need to plan for the short term if they want to succeed.
That’s according to Cox Automotive and Grant Thornton in their third annual Insight Report, which highlights major opportunities for them in response to the swiftly changing world environment.
The report says low-emission motoring, innovative vehicle finance models, online retail and connected technology are all key market dynamics.
But as well as taking a short-term approach to any immediate challenges, car dealers must also adopt a long-term view of complete change within the marketplace.
It acknowledges the major impact that the pandemic has had on the UK, and with the four nations currently in differing stages of lockdown, it says dealers will be affected in the weeks and months to come.
Research here and in the USA found that dealers need to accelerate their adoption of online retailing and staff showrooms differently.
Philip Nothard, insight and strategy director at Cox Automotive, said: ‘Dealers need to understand the conditions that underpin industry transformation, prepare for the large-scale changes which are affecting the industry today, and have a contingency plan in place to deal with potential future challenges.
‘Data is essential, and businesses which are to remain viable need to understand consumer behaviour when it comes to driving technology adoption.’
Owen Edwards, associate director at Grant Thornton, added: ‘The automotive industry is undergoing significant development. To maintain viability, it is critical to create a business strategy that embraces evolution.
‘It is difficult to plan for the unexpected, so dealers should conserve cash where possible and focus on a three-month rolling plan for immediate impact.
‘Longer-term, businesses need to ensure their strategy allows them to evolve with the market.’
The Insights team also forecast 6.41m used car transactions by the end of 2020 – a shortfall of more than one million transactions against initial forecasts.
But Cox Automotive added that the market had been in decline since its 2017 height of 8.1m transactions, as well as the 7.4m average across 2001-2019.
Next year, Cox Automotive and Grant Thornton say they expect to see 6.66m transactions.
The Cox Automotive Market Insight Report for 2020 was launched last week. View it here.
See our interview with Cox Automotive president Martin Forbes above