12:25 pm, May 9, 2024
Three major trends that were touted to be in the future and threatened to transform the motor trade are now here and represent an ‘opportunity’ for car dealers.
That’s the view of Auto Trader. The firm’s chief operating officer recently appeared on Car Dealer Live to discuss how retailers are adapting to unprecedented change in the motor trade, and to discuss how the new and used car markets are currently performing.
‘From a market health perspective and overall supply and demand, we’re getting back to more stable conditions,’ Catherine Faiers said in the video posted at the top of this story.
‘If you take things up a level and think more broadly about the big structural trends impacting our market, then we’re absolutely still in a period of unprecedented change. There’s this once-in-a-century shift to electric vehicles, the growth in omni-channel retailing, and changes in retailing models with manufacturers looking to sell directly. And then also there are those much longer term trends like autonomous functionality and vehicles, and subscription services.
‘All of those trends that either have been in the future or at the edges of the industry are now here. The big three trends – electric, omni-channel retailing and the move to agency or direct selling – have now become real.’
Faiers explained that the first trend, electric cars, will become one of huge importance for all car dealers as EVs ‘become mainstream’. She said that almost one in five vehicles aged one to three years old will be EVs this year. ‘So, they are moving from a relatively small segment of the market that potentially you could ignore, to something much more material that I don’t think can be ignored anymore.’
For omni-channel retailing, Faiers said that the industry has moved from an ‘either or’ scenario of purely online ‘disruptors’ and ‘forecourt-led, in-person transaction dealers’, to retailing that combines both of these.
Faiers added: ‘Finally, there’s agency selling. We have seen manufacturers moving to this model, and I think we’ll see a very small number of manufacturers with a pure agency model. But what’s much more likely is manufacturers moving to some kind of franchise-plus or agency-light model. These will be in place as manufacturers realise there are more challenges and complexities than perhaps they had originally envisaged.’
She went on to say: ‘These three trends are really playing out now. Even last year or a few years ago were saying these trends were coming rather than trends that were here today. This is a period of huge, huge change, but also an opportunity and a chance, I think, for us all to build the businesses that we want for the next decade.’
Elsewhere in the interview, Faiers explained Auto Trader’s prediction of May following on from April and being a strong month in the new and used car sectors.
She was speaking shortly after the firm released data that showed April was a positive month for new car sales, thanks to tempting offers on electric cars.
Click the video at the top of this story to watch the full interview.
