Car dealers plan to cut back on staff training, headcount and social media spending as the cost-of-living crisis continues to harm businesses.

The ongoing cost-of-living crisis in the UK will be the biggest challenge this year, according to more than three quarters (78%) of dealers, surveyed as part of Close Brothers Motor Finance’s Forecourt Foresight research.

Since the cost-of-living crisis took hold, more than a third (34%) of dealers are stocking more economical cars to meet the needs of buyers during the cost of living crisis.

Lisa Watson, Director of Sales at Close Brothers Motor Finance, said: “As the whole of the UK continues to grapple with the cost-of-living crisis, it’s clear that it is having a significant impact on the motor industry. Costs are rising for consumers and businesses alike, meaning demand is constrained and prices have no scope to fall. 

“It is important that we continue to work together to provide solutions and tackle the challenges faced this year. For example, by utilising insights, we can assist dealers, through our dealer funding support, with stocking forecourts to effectively meet demand and ensure that pricing is optimised, saving dealers money on unnecessary stock and making sure that they’re investing in the right places. This also helps consumers, by ensuring they can get the most for their money whilst budgets are tight.”

More than a third (35%) of dealers believe that low consumer confidence is going to be a challenge, and 35% said their business would struggle to survive if energy costs remained high.

Well documented issues affecting production, such as the semiconductor shortage, have made it hard for manufacturers to restore production to pre-pandemic levels. More than half (53%) of dealers believe that lack of stock availability is going to be a challenge in 2023.

And more than one-in-five dealers are also concerned with increased competition from online retailers, and 6% are concerned by government and industry regulation. 5% of dealers also have concerns around specific upcoming regulatory changes such as consumer duty.

Some dealers do see opportunity for the year ahead. Given recent economic growth, 39% of dealers cited an improving economy as an opportunity for their business. 35% also view the growth of online sales as an opportunity, and 34% for easing supply issues.

Despite a growing market share of AFVs (alternative fuel vehicles), only 16% agreed that the growth of electric cars and other AFVs presented an opportunity for their business during the cost-of-living crisis.

Projected changes in dealer spending in 2023:


Spending heavily right now, and will increase further

Continue to spend heavily

Spending heavily right now, but will cut back

Currently spending little and will cut back further

Continue spending little

Currently spending little, but will increase spending

Don’t know

Not relevant

Staff training

0%

3%

5%

16%

19%

5%

6%

45%

Number of staff

1%

1%

3%

13%

17%

6%

14%

44%

Website

3%

13%

13%

13%

34%

9%

6%

9%

Social media

0%

6%

10%

10%

42%

6%

6%

18%

Upkeep of premises

1%

10%

12%

14%

45%

9%

1%

6%

Stock

6%

21%

22%

16%

13%

16%

5%

1%

Advertising

1%

22%

21%

17%

27%

1%

5%

5%

Sponsorship

0%

1%

5%

13%

26%

5%

4%

45%

Subscriptions 

0%

1%

3%

10%

25%

3%

3%

56%