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Writing in Cox Automotive’s Insight Quarterly, ICDP MD Steve Young highlights the significance of the dealer’s physical interaction with the consumer and vehicles amidst changes in the industry.
Customer support is increasingly important as vehicles become more technologically advanced. The interaction involved in the administration, registration and handover of the car is done most efficiently by dealers.
On stories of consolidation, shifting manufacturer strategies, and the ongoing agency model debate, Young said: “What these stories highlight is both the opportunities and challenges in automotive retail.
“A simplistic approach adopted (with expensive external ‘expert’ advice) by some OEM brands and disruptors like Cazoo towards retail has ignored the critical support provided by dealers to keep the wheels turning.”
He adds: “The dealer handles the used car in whatever way the broader system demands. That might be buying it in for resale at risk or acting as a service provider to prepare it for a second or third lease by the manufacturer.
“Still, again, some elements of inspection, logistics, preparation, and remarketing will always be required as long as the first owner does not keep a car for life.”
Cox Automotive insight director Philip Nothard shares Young’s perspective on the interactive role of dealers.
He said: “The key to success lies in adapting to changing customer needs while proving value to manufacturers.”
“Dealers have a choice in this unfolding landscape, in that they must continually prove to OEMs that they are worth their salt and here to stay.
“That physical interactive element will always be with us – and will no doubt serve as proof of their importance, no matter the industry developments we are likely to see.”