The well documented fall in 2017 car sales was of no surprise to those of us in the industry, who have seen first-hand how successive governments have demonised against diesel car owners without offering viable alternatives to replace existing models.

January’s figures, which saw petrol sales increase but diesel continue to capitulate, offered little comfort to dealers who rely on diesel to keep sales, and therefore profits,  steady.

The well-publicised attacks on private car owners, led in recent times by Philip Hammond and Sadiq Kahn, saw commercial vehicles – which are the major problem in most of our major cities – largely exempt from punishment.

And not only will diesel car owners be punished for using their existing model, but for obvious reasons they may not want to head back to certain manufacturer brands for a new diesel motor.

Follow the lead

As expected, this has meant many users are running their existing models to the ground.

Existing scrappage schemes are either insufficient or merely encourage the purchase of new diesel models and seen as though EV, en masse, is still at least five to ten years away, there is no practical alternative for UK motorists.

As a result, many dealers will be feeling the pinch over the coming months and years, but within every danger lies opportunity, and now is the time to get innovative to keep sales coming in.

The real opportunity for dealers here lies in three areas; maximising existing leads, aftercare & retention and increasing used car sales.

Auto Trader states that 50% of leads don’t get contacted or the approach is left too late to secure a sale. That is a terrible business model across any industry and dealers who operate on that basis will struggle to be here in three to five years’ time. 

It’s time for dealers to start treating OEM leads as importantly they do carwow leads. Timely, effective and friendly feedback to all enquiries will be the first step to seeing customers build loyalty with a particular dealership.

Dealers who communicate effectively and begin to offer reward schemes or create a value exchange policy through the car owning lifecycle is something OEMs and dealers have always struggled with, but now, more than ever, is the time to bring the outdated car sales approach into the 21st century.

Using third party information on orphan car owners to encourage new sales is one important element, but another is creativity.

Not ‘back to basics’

Using third party information on orphan car owners to encourage new sales is one important element, but another is creativity.

I see a lot of comment about dealers going back to basics – I’d advise against that. Now is very much the time to get innovative.

Extended weekend test drives should be allowed to take place from a home address at a convenient time, dealers should be going to the customer opposed to the customer coming to them.

To take that further, should dealers even arrange for lunch time test drives at people’s workplace, or pop-up, temporary garages outside business which employ thousands of people?

Those that embrace change and take more chances  will succeed in what is a difficult environment – and this is all before we’ve seen what Amazon has to offer. 

Aftersales could be key

The final element is aftersales care and retention, and this again links back to customer service.

The average motorist has several options about where to get an MOT, service or repairs, and dealers may be beaten on price by smaller independent garages. No one looks forward to an MOT, a repair can fill people with worry. The experience needs to be one to remember for the right reason for the consumer. Efficient, friendly advice which educates each person on what and why changes have been made to their car will see dealers benefit from repeat custom.

I fully expect Kahn’s demonisation of diesel to continue and just as certain is that Hammond’s EV timescale will be pushed back, not because the manufacturers aren’t ready, but because the government isn’t.

However, dealers cannot impact that, so maximising each and every lead, improving customer retention and improving market share among after sales and used cars will at least allow for a more prosperous 2018 and beyond. 

Author: Chris Green, co-founder, Regit