9:22 am, March 7, 2023
The technology to support the switch to agency sales does not currently exist and it will take time for the model to succeed, an expert has told Car Dealer.
Speaking on the latest instalment of the Car Dealer Podcast, ATG chief executive Tim Smith said that new agency agreements are ‘easy to pull apart’ and need more work.
The software boss also praised Volkswagen Group’s decision to delay agency sales until 2024 due to issues with its internal system.
Smith told host James Baggott: ‘It’s an enormous amount of work.
‘I was with dealers on Tuesday and the comment that came back loud and clear was they were literally being called in left, right and centre to these agency calls with their manufacturer partners, on a very regular basis.
‘They’re presented a lot of information in 100 page documents that are supposed to outline the new agreements.
‘These guys are serious operators and they can pull this stuff apart very very easily. There are so many elements to it.
‘It is just going to take so much time to wash through and it seems to me that it has happened in quite an accelerated period. I first-hand know that a lot of the technology that should provide this seamlessness doesn’t actually exist to a certain extent.’
He added: ‘I won’t name names but systems that you need to be able to call for finance for example are not built to run hyperlive calculations and give this penny accuracy right to the consumer at the front end of their journey.
‘That is just one example but there is a whole flow in terms of vehicle data and in terms of inventory. How do you virtualise and entire inventory across a manufacturer and then almost carve that up across all of your retailers?
‘There is so much complexity. It is going to take a lot longer and I think actually, fair play to VW. They’re taking a step back, wanting to do this properly and I think that’s the best way of approaching it really.’
Vehicle sales ‘rising above’ cost-of-living crisis
Elsewhere, Smith told the podcast that automotive retailers have started the year well, despite ‘doom and gloom’ in the wider economy.
He said that dealers have so far managed to ‘rise above’ issues affecting other industries, such as inflation and the cost-of-living crisis.
‘I think the year has started pretty well, he told Car Dealer. ‘I think we’re probably all a little bit surprised at the fact that all the doom and gloom with the cost of living and all of that nasty stuff isn’t really come through to vehicle sales.
‘I think there’s some positive forecasts there. The SMMT have upped the new car vehicle sales in the UK a little bit last month and we’re still seeing and hearing from our dealers that they’re doing a good job.
‘I think it’s cautiously optimistic but who knows? Government, economy, it could all go off the rails, but let’s stay positive.’
Smith also praised dealers for ‘doing more with less’ as stock issues continue to impact business up and down the country.
He added: ‘I think the sector itself seems to be doing more with less. Obviously, stock remains short supply, but it means that there’s a bit more profit sloshing around on every unit just because volumes are slightly lower than at peak times.
‘We’ve got a little bit of headroom and some breathing space and it’s good to see that there is profitability across the board for manufacturers, and retailers as well. long may it continue.’
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