Automotive dealers: The servicing elephant in the room

I can’t believe another year is nearly over. And what a rollercoaster of a year it’s been for the automotive sector!

Despite all the challenges and business change to accommodate the ‘Covid customer’, automotive retail will go into 2022 in rude good health.

Automotive brief

Our call index shows that used car enquiry is tracking previous years. We expect this to tail off as we go into the traditionally quiet period of December. While some dealers will believe the end of the world has come because it’s quiet, December is a good time to draw breath and plan for all that 2022 will bring.

While you’re drawing breath, it would be a good time to look at the servicing elephant in the room. Even though car sales may be strong, due to the reduced volume of new sales, this will affect your service work over the next three years. It’s easy to analyse the scale of this challenge by taking your new sales for 2018, ’19, ’20 and ’21 and applying the appropriate percentage of service work you would expect to get, and then map this going forward. This will allow you to map the ‘gap’ and come up with appropriate strategy to back fill the shortages. Do get in touch if you want me to explain more.

The market for nearly new and one to two year stock continues to be very tight, as you can see from the graphs in the call index. Total sub-year stock on Autotrader is down by 68% from 2019 to 2021, and one to two year stock is down by 38%. As new vehicle supply continues to be tight, there’s no need to slash prices as usually happens in the run-up to December year end.

Headline Autotrader figures

  • 2021 stock, MoM 2.4% increase, YoY 44.3% decrease
  • 2020 stock MoM 2.2 increase, YoY 43.5% decrease
  • Total market MoM 3.8% increase, YoY 15.5% decrease

Top 5 brands by market share of 2021 stock

  • VW 12.7%
  • BMW 10.0%
  • Audi 10.0%
  • Mercedes 5.7%
  • Volvo 5.6%

Until next time…

Wishing you all a very Merry Christmas and a very prosperous new year!

About the author - Harry Bott

Harry Bott, Director at Mediahawk, has over 20 years of experience helping marketers generate a better response from their marketing. He has enabled businesses to improve their conversion rates through his consultative approach and deep understanding across various sectors, including automotive and care homes.

Family at car dealership, examinng autodata.
Automotive call index

Our call index shows that demand for used cars is reducing as we go into December. With very tight new cars supply, now is not the time to reduce prices.

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