21% of dealers have shifted their focus towards online sales and a further one in six (16%) plan on following suit to make savings by reducing staff and premises costs according to Close Brothers Motor Finance’s dealer survey.
The Forecourt Foresight research also found that one in five (22%) dealers have already had to stop or pause hiring new staff to save money; and 8% more expect to do this soon.
The unpredictable economic conditions continue to mount pressure on the motor industry, with dealers feeling the weight of the challenges as costs soar.
Dealers are having to take further steps to mitigate the impact of rising costs, which in turn is having a significant effect on the day-to-day running of their businesses.
Increasing costs are also hampering the required shift to alternative fuel vehicles (AFVs), which is needed to facilitate the 2030 ban on new petrol and diesel vehicles. 19% of dealers admit to having to hold off investing in AFV/EV infrastructure, such as installing charging points.
Almost one in ten (9%) say that while they haven’t had to yet, they expect to postpone this investment in the months ahead.
Rising rent costs, utility bills and general day-to-day costs increasing have resulted in 11% of dealers saying they’ve had to reduce their trading hours, while the same number have postponed investment in their forecourt.
Lisa Watson, director of sales at Close Brothers Motor Finance, said: “It’s clear that the industry is in urgent need of support, as spiralling costs impact the growth potential of dealerships.
“Until then, dealers will need to do what they can, including maximising available tools and insight to make sure they aren’t overpaying for stock, and can meet consumer demand to help optimise profit.
“Support is also crucial for the adoption of AFVs in the UK. Dealers will play a crucial part in this shift, and they cannot do so if costs are prohibiting them from being able to properly cater for the transition. Without the required support, the UK’s AFV targets will be increasingly harder to achieve.”