Automotive dealers: A time of known unknowns

There’s no sign of let up in the strong used car market and the continuing lack of new supply to automotive showrooms. The largest challenge will come from a Rumsfeld ‘known unknown’. While dealers are making great profits, the tightrope of stability feels fragile.

We’re seeing some significant macro challenges coming through affecting the economy, and one of these could knock confidence which will feed through to the overall market.

Headline Autotrader figures

  • 2021 stock, MoM 16.9% increase, YoY 1% increase
  • 2020 stock MoM 4.6% decrease, YoY 42.1% decrease
  • Total market MoM 1.9% increase, YoY 9.0% decrease

Top 5 brands by market share of 2021 stock

  • VW 12.8%
  • Audi 9.4%
  • BMW 9.0%
  • Mercedes 6.0%
  • Skoda 5.3%

Automotive brief

September is traditionally a month of great stress. Dealers push the plate change to maximise sales before going into the final quarter which is always difficult.

However, this year there has been no push on plate change because there’s nothing to change! The lack of new supply is quite astonishing, especially for some brands such as Jaguar and Land Rover.

There’s been a distinct shift in the way consumers are being marketed to. Instead of advertising cars for sale, the focus is on buying used stock. Large dealer groups have turned their business model around, and are now concentrating on the ‘we buy any car‘ model as they desperately chase stock to refill their forecourts.

As I stated last month, the reduced sales volumes will hit cash flow – not profits. With this, I’m expecting a raft of consolidation in the New Year, with small dealers falling into the hands of the ‘super groups’. For now though, they’re holding out…

In another life, I’m a farmer and the hay season has been dreadful. Hopefully this is not a portent of things to come, so may you all make hay while the sun continues to shine.

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.
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