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UK car dealers remain ‘resolutely optimistic’ despite Brexit

Close Brothers Motor Finance’s director of sales Sean Kemple

UK car dealers remain ‘resolutely optimistic’ despite Brexit, diesel vehicles’ negative press and increased competition for used car stock in 2019, according to Close Brothers Motor Finance.

The South Yorkshire-based automotive finance provider’s quarterly dealer satisfaction survey found that 95% of dealership operators remained confident of their business’ prospects for 2019, with “maintaining stability” cited as a top opportunity in the months ahead.

The strong show of confidence among survey respondents was up from 93% last year and, of these, six in ten (60%) are ‘very confident’ about the business outlook for the year ahead.

Despite the proportion of dealers with concerns about Brexit, changes to legislation and regulation, and stock availability having increased significantly in the last year, concerns remain at a low level, according to the survey.

Sean Kemple, director of sales at Close Brothers Motor Finance said: “Our quarterly Dealer Satisfaction Survey is a granular look at the current sentiment of dealers in the UK, and provides us with real insight into current and future priorities of dealers nationwide.

“Despite many warning of post-Brexit gloom, the UK’s dealers remain resolutely optimistic about the future success of the sector.”

Close Brothers’ research found that concerns about Brexit had increased significantly, with 35% of dealers seeing it as the biggest threat to their business, up from 26% last year.

Similarly, the proportion affected by legislation and regulation has almost doubled from 9% last year to 16%, and those worried mostly about stock availability has risen from 3% to 10%.

The impact of the WLTP legislation, which significantly impacted the availability of diesel and petrol cars in the new and used market, is also clearly a factor, with the prospect of September’s roll-out into the commercial vehicle sector looking set to cause further disruption for some retailers.

Interestingly, Close Brothers noted that the perceived threat of an economic downturn has dropped from 17% in 2018, to 8% now, however.

More dealers are keen to focus on maintaining stability (14% to 24%), it said, and one in six (35%) are keen to expand their offering to new types of vehicles. This reflects the increased sales figures for alternatively fuelled vehicles (AFVs) from the Society of Motor Manufacturers and Traders (SMMT) over the year.

Kemple said: “Of course the threats to the sector cannot be ignored, and it’s no surprise that we’ve seen increased dealer concern about legislation and stock availability in reaction to WLTP.

“Car manufacturing and registrations alike have suffered, and dealers’ bottom lines have subsequently done the same. But there is hope to be had. Ripe opportunities exist in expanding the forecourt to meet evolving consumer demand, be that new fuel types, new models, expanding the used stock selection, or an enhanced after-sales proposition.

“To seize these opportunities, dealers must establish themselves as a source of expertise and reassurance to customers.”

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