Snows Motor Group executive Neil McCue believes car dealers are heading for the ‘biggest change’ they’ve ever seen as agency sales models begin to become more popular.
Speaking to the latest Car Dealer Podcast, chief operating officer McCue said agency sales – where car makers sell vehicles directly to consumers via their websites and offer dealers a handling fee to hand them over – are the ‘way forward’.
Volvo – of which Snows has two franchises – has already said it will be moving to an agency model by 2030.
McCue, pictured above with Stephen Snow, said: ‘The next two to three years will be fascinating and the biggest change to our industry ever.’
He said the current sales model had ‘many challenges’ and was ‘a bit messy and old fashioned’.
Moving to an agency alternative was a ‘sensible thing’, said McCue, but dealers needed to be ‘fairly compensated’ for their time.
He added: ‘The thing that drives behaviour now is targets, you can’t get away from that and you do what you need to do to achieve that.
‘But if the target goes away, and someone clicks online to buy a car and you get a nice handover fee, it takes a little bit of pressure away.
‘We trust Volvo and have some great facilities with them and they’ve got a great lineup of cars. I think it’s going to work.
‘The online journey is the way forward as having different prices everywhere and special deals doesn’t work.
‘People want the wow experience of a car handover and to enjoy that experience.’
McCue joined the Car Dealer Podcast to chat about the week’s headlines in our weekly show that recaps the news.
He also chatted about getting ready for the reopening on April 12, his thoughts on online car sales and whether they’re here for the long run and his shock at the changes to the plug-in car grant last week.
Last week, the government changed the terms of the plug-in car grant over night, cutting funding by £500 per car and reducing the maximum price of EVs eligible from £50k to £35k.
McCue said: ‘I understand the government has given the country so much money – and it’s not an endless supply of money – but to do it overnight and not let anyone know, well, that wasn’t great.
‘I do understand the decision but it was the way that it was done that surprised me.’
The Snows chief said he bought into the belief that there will be significant pent-up demand among car buyers when showrooms finally reopen and said his team was busy preparing for it.
‘The closer we get to coming out it has picked up with lots more enquiries and test drive bookings,’ said McCue.
‘I think there are positive signs that people will want to upgrade their cars to make them feel a bit better. I think it will be very good news for us all.’
He said he thinks while people will want to enjoy having a bit more money in their bank accounts from the savings they’ve accumulated during lockdown, he still thinks there will be a ‘positive effect’ for the car industry.
He added: ‘Are people going to go and blow a load of money? I’m not sure they are.
‘They’ll probably enjoy having some money in the bank.
‘Yes, I do think they’ll be another bounce back.
‘I think people will still be reluctant to go on holiday too. I certainly don’t want to go on holiday and I don’t want to take any risks or be forced into isolation. I think people will have extra money left over from that.’
McCue said he was keeping a close eye on the Scottish market as it opens showrooms a week earlier on April 5 than England as it will give him a good idea of the pent-up demand that is out there.
He added: ‘We can only follow from the first lockdown – look what happened there and I think it will be the same, I really do.’
The Snows boss said he was surprised at how customers have taken to online sales, but insists a ‘blended retailing’ future will be more likely for Snows with part of the car buying journey carried out online and part in showrooms.
He said: ‘Many motor trade businesses have changed forever. It’s also exciting and we have to embrace this world we’re in now and keep driving change.
‘I think people will want to get out of the house, get in the car and go and see other people and get out of the house, but as a group we are not ignoring online sales.
‘People will still buy online, but I do think people want to get out and go somewhere different and drink our coffee and our tea.’
You can listen to the latest issue of the Car Dealer Podcast by clicking on the player embedded above or by searching ‘Car Dealer Podcast’ on your favourite podcast platform, including Apple and Spotify.