The Supplier's View: Glass’s managing director Ian Tillbrook tells AM about how total cost of ownership and the move to PCP deals are affecting new and used car markets and how dealers can use data to adapt.
What is your view on the current UK new and used car markets?
I’ve been out to see most of the major dealer groups in recent weeks and, despite new car sales being buoyant, their focus still seems to be heavily on used cars. It seems that the manufacturers are governing new car distribution and sales terms.
There’s a staggering amount of interest in the PCP world. It shows how suddenly, after all these years, the consumer’s idea of cost of motoring is changing – they’re moving from owning the car to using one on contract.
The big subject manufacturers are talking about is total cost of ownership. It will be very powerful if a customer can come into the retailer and see how their car compares with other cars they like. That’s another opportunity for us, because they need the information. There’s definitely a growing need for the things we can produce.
What could this change in consumer behaviour mean for the used car market?
Some retail customers might once have kept a car until it was quite old, but now these PCP cars will come back as used cars in two or three years.
That may mean the supply and demand model will change when these cars come back into the dealer networks, with a risk that it will put prices under pressure.
At the moment, leasing companies enjoy good profits from selling end-of-lease cars because of low supply in the used car market. They will have to begin including retail figures in their calculations, because two-thirds of new retail cars are funded on PCP.
We’re also now seeing a lot more resource being put into manufacturers’ remarketing departments.
What crucial aspect of used car retailing can dealers improve?
There’s a lot of intelligence out there to help these dealer groups be more focused on their used car operations. It’s become much more structured, with far more performance reporting and KPIs and far less sticking a finger in the air to do the deal. They seem to be getting a more cohesive view of their dealerships. Those dealers doing this are turning good stock more quickly and making good numbers.
So what is the key point of focus?
Most elements of the used car business have a strong impact on profits for the dealer. First is sourcing good stock – buying rationally, so ensuring the cars are right for their stock profile and territory, and ensuring they price them to sell and meet their KPIs such as days in stock. It’s basic, but very important. With GlassNet Radar, they can see exactly what’s on the market in their area at what prices, so they can ensure they’re competitive.
How important to you are your relationships with dealers?
It’s our contact with dealers that allows us to think how we can help them. At Glass’s we have to make sure we can give dealer groups the tools that help them make the right decisions.
Radar is one, but Analyser takes this further for the whole stock. It’s a more orderly way to monitor and set asking prices, benchmark, ensure quicker sales and manage the forecourt effectively.
We provide data, and if that data doesn’t add value or if it’s not provided quickly and accurately, dealers won’t buy it. Values and data are where we’re laying our business out.