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NFDA questions KPMG global survey's car dealership predictions

Sue Robinson, director of the National Franchised Dealers Association

The National Franchised Dealers Association (NFDA) has questioned the findings of a global KPMG survey in which automotive executives suggested up to 50% of car dealerships could close by 2030.

NFDA director Sue Robinson said that she was “concerned by the statistical validity” of the consultancy’s Global Automotive Executive Survey 2019 due to its very low number of UK-based respondents and a lack of representation for the franchised retail sector, in particular.

KPMG said that it had interviewed more executives than in any previous year to produce its global survey’s results, adding that half of its 981 respondents were chief executives, presidents, chairmen or C-level executives, who helped to provide “profound insights into the core of the automotive industry”.

It added: “Our sample is split evenly between the upstream (product-driven) and the downstream (service-driven) markets, with a more equal share for the respective players than in previous years”.

However, scrutiny of the survey by the NFDA revealed that just 55 respondents hailed from the UK, with only one dealer group chief executive having been surveyed.

Robinson said: “NFDA is concerned by the statistical validity of the KPMG survey in the UK due to the low representation of our sector, in particular, UK dealers and manufacturers.”

The NFDA noted that the sole UK-based dealer CEO who did respond to the question on the future of car dealerships believed that 20% of dealerships will close by 2030 – below the survey average of 30% to 50%.

Only two manufacturer chief executives responded to the survey, the NFDA said.

The NFDA added that, looking at manufacturers’ and dealers’ responses of employees of all levels, the number of responses rose to nine, with 67% stating that the number of dealerships would reduce by 20%.

“Overall in the UK, out of 55 total respondents, 42% believe dealerships will reduce by 20%,” the NFDA said in a statement.

Robinson added: “The automotive retail industry is evolving and retailers are continuously adapting, however, it is important to note that these figures do not reflect UK franchised retailers’ views.

“The UK market is already much more concentrated than other markets in Europe and, therefore, likely to see lower levels of consolidation going forward.”

The results of KPMG’s Global Automotive Executive Survey 2019, which was published this week found that executives from the sector, across the globe, believe that 30% to 50% of car dealerships will be closed by 2030.

This result came a year after respondents to the same survey suggested that 20% to 50% of car retail operations could be closed by 2025.

Detailing the results of the survey, in relation to the future of car retail, the resulting report said that "almost half (48%) of all surveyed executives are highly confident that the number of physical retail outlets as we know them today will be reduced by 30% to 50% by 2025", but added that the slight shift in timescale suggested that “the change will not take place as quickly as may be expected”.

It said: “Results also indicate that currently, OEMs are already more pessimistic about the future of retail in comparison to the retailers themselves.

“This scenario is certainly astonishing initially. However, when considering customer behaviour, which is changing and migrating from retail stores to online channels, from one-time product purchase to on-demand recurring mobility transactions – especially in urban environments or due to the fact that in mature markets, specifically members of the younger generation will no longer want to own a car – it is an absolutely realistic scenario, and one which executives especially from mature markets, such as the US or China, agree with.”

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