The electric vehicles (EV) revolution and new agency retail models are said to be placing up to 70% of existing dealership profit at risk in the next decade.
Boston Consulting Group partner Arturs Smilkstins made the claim as he warned retailers they were standing on a “burning platform” and must evolve quickly to embrace change when he addressed the Inspitation Theatre at Automotive Management Live.
Speaking at the showcase car retail expo event, at the NEC in Birmingham, Smilkstins said that 50% of car sales could be headed online by 2025 as OEMs target greater profitability through the provision of services.
“The questions are what are those services and how do you sell them?” he said.
Smilkstins said that cost reductions would be needed, suggesting a restructure of physical retail and aftersales facilities is likely to help.
Urging retailers to take time to step back and consider how the business could be done differently, he said: “Ask yourself, if Google or Amazon were entering automotive retail what kind of questions would they expect to be able to answer instantly?”
Following Smilkstins on stage, Salesforce sales director Matthew Simpkins said customer data held the key to dealers’ ability to “take back control”.
Simpkins said only around 50% of the AM100’s top 50 dealers have “a logged-in area of their web site where you can collect first-party data that you can access
and use throughout the ownership lifecycle”.
He said that more need to be done to gather and leverage the use of this data, adding: “Ultimately, though, we need to see data democratised.”
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