It's tough out there!
It’s tough out there!
I started this Blog in Nov 2019 and finished it in March 2020
2019 hasn’t been kind for motor dealers both locally and nationally.
“Lookers, one of Britain's biggest car dealership chains, issued a profits alert last week, as two of its senior executives announced they would be leaving the firm. The brand said it expected to see pre-tax profits of approximately £20 million in 2019, down from £67.3 million in 2018.”
It also announced plans to 'accelerate its portfolio consolidation', identifying 15 individual dealerships for closure. All but two of these dealerships are expected to be closed by the end of the year. It follows car dealership firm Pendragon, which recently announced plans to close 22 of its 34 Car Store sites. – Honest John
“Up to half of UK car dealerships will close by 2025, according to respondents to KPMG’s Global Automotive Executive Survey 2018.”
“A bleak future was mapped out by the survey’s 907 respondents, who occupy position of chief executive, president, chairman or C-level executive, as 75% said that between 20% to 50% of the brick-and-mortar automotive retail sector could disappear in just seven years. “ - AM ONLINE
“Pendragon slashes 300 jobs as car dealerships firm swings to a loss. Almost two thirds of car showrooms are set to close and business blames Brexit for creating uncertainty among consumers” i-news
Picking up this blog in March 2020 has seen Brexit finally take place and a bit more stability in the market however there have been more casualties in the trade. Some big names in the local motor trade have closed their doors unfortunately and one of our biggest service contracts has ceased as a result. These companies have been synonymous in the motor trade for 30 years plus and it’s a sad day to see them close the doors leaving a massive hole in the trade and less a few huge personalities.
It’s no secret that margins are being squeezed as competition increases across all levels. The trade in prices are being driven up by the consumer being able to sell themselves directly or to third party sites, more active dealers in the market and supermarket strategies driving retail prices down, it leaves little profit for the dealer. With ever increasing CRA demands, and more money spent on aftersales, the pressure is on the dealers to just keep the business going.
In recent months, I have seen desperate tactics employed by the dealers in an attempt to retain any profit and more importantly keep their business open. I have seen used car dealers charge the customer for all sorts of things we expect to be standard including:
Fuel
Admin fees
HPI checks
Mats
Alloys
The trade is evolving quickly as technology develops and connects everyone. We are thankful for our loyal customers who support us week in and week out. We look forward to continuing to provide them with an honest, professional service at competitive prices.