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The Big Picture: Customers will dictate future

What is the future for the car retail industry? In 10 years’ time, will there still be 6,000 dealerships, most single or dual franchised? Or will there be a network of 200 supercentres selling every car brand supported by 10,000 repairers?

The debate over waste and efficiency is producing some interesting arguments on the AM Forum.

On one side is Ling Valentine, the devoted clipper of dealers’ wings. She believes customers would jump at the chance to visit associated shops where they can look at every car. It would be a bit like, in Ling’s words, “a motor show all year long”.

But there are 366 new model ranges on the market (not including derivatives). It would take a mighty facility to display all those and do them justice. Customers probably don’t want to see them all but they will want a test drive. Ling’s vision is for rental companies offering fast rentals, of an hour or more.

On the other side are franchised dealers who believe the current structure is best for the 2.4 million new car buyers and the seven million used car customers.

Neither side has the total answer. There is certainly a lot of inefficiency in the current set up, which is being partly addressed by the growth in multi-brand sites and retail parks and the moves by some dealers to shift repair on to cheaper industrial estates.

It is also being aided by the internet, which enables people to whittle down their choice to two or three cars (that’s now the average number of showrooms a customer visits before making a purchase).

Ling’s vision is too restricted to meet everyone’s needs and creates its own complications. She views the car as a lump of metal, but many owners view it as their most prized possession.

And that’s the beauty of people – every one is an individual. There isn’t a one size fits all solution.

The motor industry already offers people choice. They can buy from a dealer, online, from a multi-brand car supermarket or via a contract hire supplier.

Ultimately customers will dictate how the market structure changes by voting with their wallets.

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