OEMs and dealers are accelerating their investment in digital channels, with 60% of dealers expecting to offer online transaction capabilities within the next two years.
This is according to a report from Cox Automotive and Grant Thornton, which found that just 20% of UK dealers currently have a full online sales transaction option.
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Philip Nothard, customer insight and strategy director at Cox Automotive, said: “The role of the dealer is still crucial, but we know that consumers want to interact with the automotive retailer in a variety of ways – notably via a range of digital platforms.
“Our analysis clearly shows it is not just a case of replicating the retail experience via the internet. Those dealers that are leading the retail evolution are embracing technology to improve the customer experience and bring more flexibility into the car buying process.”
The report also found that more than 90% of car dealers expect to see some decline in the number of UK dealerships over the next five years, with six in 10 respondents predicting a fall of 10% or more.
Since the global recession, Cox Automotive found there has been an increase in the level of consolidation in the automotive retail market. This is particularly true among franchised dealers looking to increase profitability through efficiency improvements, cost savings and economies of scale.
Nothard added: “We asked dealers for their opinion on the future of car retail outlets in the next five years and the response was consistent with the consolidation trend.
“None of the respondents anticipated a rise in the number of UK dealer locations, and the vast majority (94%) expected some contraction, with 43% predicting a reduction of 10- 15%, far more conservative than some of the recent headlines on shifting industry trends.”
“What’s clear is that consolidation is a method of improving efficiency, the number of dealerships may reduce, but what will emerge are stronger businesses that are better suited to the market.”
