In this publication, our team discuss the latest trends in the motor vehicle dealership industry and the key pressures facing the industry.

New car sales are down, month on month, for 16 consecutive months since April 2018. 2019 sales are down 8% on 2018. This is not news to you, or to industry participants, but market wide trends are far from the whole story, even if this downturn reverses in the near term; challenges, options and opportunities warrant a deeper dive.

Key Highlights

  1. Declining sales and tail revenue
    16 consecutive months of declining sales – revenue streams start with new car sales – selling margin, finance and insurance, servicing, dealer fitted accessories: no sale, no tail revenue.
  1. Brand is everything
    New car dealers are typically exposed to one or two brands, with limited options to change brands in the short term, and no immediate influence on product. If a dealer's brand range is not resonating with the market, there is little that can be done. Brand is absolutely key to identify dealer distress, current or coming.
  1. Premises are specialised; the dealership model is changing
    Improvements are specialised and can't readily be repurposed for traditional industrial or retail uses. A move toward shopping centre, high street and convenience locations has commenced, challenging property values in dealership strongholds. The wholesale to public, mega outlet, warehouse second hand model is growing, challenging used car revenues for traditional dealers.
  1. Consumer and technological change
    Consumer behaviour is in transition. Consumers are looking for a more convenient 'retail' experience and brands are responding accordingly, challenging the current dealership model. Technology is changing behaviours through on demand services (ride-sharing/car-sharing), electric vehicle and driver-assistance/autonomous vehicles which are expected to further depress new car sales.

To read the full paper, click Download PDF below.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.