Mark Standish, chief executive of MotoNovo Finance, has called for the reinvention of the car retailing model in the wake of the coronavirus crisis.
“COVID-19 has been tough for the dealer community, but looking at things optimistically, it can be the catalyst for positive change,” said Standish. “It is time for dealers to seize the initiative, re-engineer their businesses and get closer to customers. Radically cutting out the middle-people in the car distribution chain that has added friction and cost to customers’ buying experiences.”
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Central to Standish’s thinking are five ‘controllable’ areas across the supply chain that every dealer can assess and control:
- Used vehicle stock – determining who and if third-parties can leverage its value;
- Customers’ online journeys – from aggregators/lead suppliers to internal contact processes what is the online customer experience and what areas of friction can be removed/reduced?
- Digital capabilities – how can you improve in-house skills and leverage support from your suppliers to create a richer, online customer experience of your dealership, services, culture and expertise and enhance the quality of vehicle information?
- Costs – consider how to become leaner and reduce costs permanently;
- Supplier review – are your key relationships centred on collaboration; are suppliers adding value (or taking it) both in their core areas of expertise and in adding to your capabilities in other areas such as digital expertise?
Standish believes that the challenges thrown up by COVID-19 can prove to be a decisive watershed moment for car retailers, noting: “The shift towards digital car buying model has been testing for many dealers; profitability and critical customer relationships have been eroded by a series of online businesses placing themselves between the dealer and car buyer. It has been neither deliberate or rapid, but as the saying goes; ‘dripping water will erode an entire mountain, possibly without the mountain noticing.’ It is time for dealers to take out costs and competition and make digitisation work for them and their customers.”
Dealers have an opportunity right now to establish the ‘network effect’ of a dealer-led marketplace platform, said Standish. The co-operative appeal of findandfundmycar.com has always been clear and it has enjoyed sustained and steady growth, but if dealers want to free themselves of cost, competition for F&I services and get closer to customers now can be the right time, right place.
“As a long-term dealer-centric business we pride ourselves on helping the dealer community,” Standish continued. “Right now, I am very aware of the pressure on dealers, but I don’t believe that the way forward is to ‘do what we have always done.’ Now, is the time for dealers to assess how to re-engineer the car retailing model, cut costs and gain greater control of their businesses and customers.”
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