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Dealers facing threat of 'off-the-shelf' car purchasing

Dealers need to be prepared for the moment high street retailers start selling a 'car-in-a-box' package that provides a customer with all the information they need about a vehicle in order to make a decision to purchase.

Greg Connell, managing director of motor industry technology specialist Epyx and former MD of Car Fleet Control, warns that the growth in the internet has been one of the sparks that has led to an expansion in the number of ways cars can be sold. The Block Exemption debate has poured petrol on the flames.

The Block Exemption review next year will push for a clamp down on restriction car makers place on where and who sells their cars. Their reaction will be to explore new routes to market, lessening – but not eradicating - the role of the dealer. “Manufacturers will be more open to new routes to market. A large number of them are looking to sell direct. But all realise there are unexplored ways to selling cars,” he said.

“Technology allows cars to be sold anywhere. It could be a supermarket. It is possible to sell a car in a box, in the same way that stores are selling gift packages for weekends away or tank driving courses on their shelves. You can put everything you need to know in a box – colour of car, a swab of interior material, finance form. You only have to sign the form and you've bought a car. By the time they've reached this stage they don't need to have the car in front of them.

“This would overcome the supermarket's aversion to taking up valuable shelf space to showcase a car.”

In the event of this Mr Connell foresees dealers' roles changing. With the sales function diluted, a manufacturer would pay dealers for each test drive they arrange, PDI and deliveries and fulfillment. A dealer would be valuable in supporting multiple routes to market.

“Manufacturers need their dealer networks for merchanding purposes and aftersales support. And remember a lot of carmakers can't afford to own a sales network,” Mr Connell said.

Epyx, which boasts former BMW MD Kevin Gaskell as a non-executive director, is focussing its efforts on promoting 1Link, a software package that uses the internet to simplify bulk buying of cars. Eypx describes it as an electronic trading community allowing vehicle purchasing, order tracking and processing, quotations, vehicle discounting and bonus handling.

Eypx is targeting contract hire and leasing companies with 1Link. Mr Connell said that in the next full year he plans to have 100,000 cars ordered through 1Link. In the following two years the total is forecast to reach 250,000.

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