Cox Automotive: UK car market has changed fundamentally

Paul Fisher | 11 June 2019

Auto retail data group publishes 2019 report on the state of the UK car retail market. Electrification, consolidation and changes in ownership models are having a real effect.

The 2019 Insight Report from Cox Automotive shows UK car retail market under pressure from the structural challenges facing OEMs.

Sizeable research and development investment into EVs and battery production , coupled with weak demand in the market for new vehicles, has put the profitability of the automotive manufacturers under pressure, it reports.

“Against a backdrop of declining profits, many of these companies have reviewed their cost base, looking for ways to reduce costs and inefficiencies from supply chains and distribution networks.” says report co-author Owen Edwards, associate director, Grant Thornton.

Consolidation of dealerships will continue
Consolidation has characterised the franchise dealer sector for a number of years, and the number of franchise outlets has declined.

Cox believes that rationalisation will continue, the larger dealer groups will become bigger with fewer franchise outlets.

Changes in car buying habits are changing the dealers’ traditional role.

“Longer-term, changing consumer behaviours have accelerated the need for both manufacturers and dealers to invest in e-commerce,” says Philip Nothard, customer insight and strategy director, Cox Automotive UK.

“In my view, success in this area will be achieved by using digital tools to improve the customer journey, rather than attempting to duplicate the physical dealership experience online.”

Changing consumer demand
The report notes a change in the way that consumers purchase vehicles will mean that the sales process will have to evolve to meet the consumers’ demands. Additionally, there will also be changes to the way in which consumers prefer to finance their vehicles.

Meet some men from the motor trade.

The personal vehicle market is also evolving with increased growth in Personal Contract Hire as consumers once again become used to other payment processes. Further disruption is expected in the consumer vehicle financing market with the entrance of new disruptor companies.

The big losers according to the report are diesel sales. Values of used diesels are simply not sustainable. “As diesel’s decline is accelerated by advances in technology, the roll-out of fast charging infrastructures, more affordable EVs and the adoption of low emission zones in other cities, so their value will follow suit.” it says.

Loading cart ⌛️ ...

Like Carpaul?

Join our email list to get news alerts and info on events and other goodies.