Dealers look to reduce headcount and costs with help of online sales

An increasing number of automotive retailers are looking for online sales to help save on costs and headcount, according to Close Brothers Motor Finance.

The company’s latest Forecourt Foresight survey shows that 21% of dealers have already shifted their focus to online sales and one-in-six plan to follow suit to make savings on reducing staffing and premises costs.

The research also found that one in five (22%) dealers have already had to stop or pause on hiring new staff to save money; and 8% more expect to do this soon.

Close Brothers said the current unpredictable economic conditions continue to mount pressure on the motor industry, with dealers feeling the weight of the challenges as costs soar.

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.

The Forecourt Foresight is based on the views of 200 owners, decision makers and managers in car dealerships in the UK in January 2023.

Of those surveyed, 19% said that they have had to hold off from investing in charging infrastructure for plug-in vehicles  and almost one in 10 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 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 over-paying for stock, and can meet consumer demand to help optimise profit.

“Support is also crucial for the adoption of alternative fuel vehicles (AFV) 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 are going to be increasingly harder to achieve.”