What will the future hold?
“Some weeks nothing happens, some weeks, decades happen”
You’d be a very brave individual to attempt to predict what the automotive industry will look like on the other side of the COVID-19 outbreak. But I believe there are some things that are worth considering when you are trying to look beyond the current situation. To understand the lay of the land in a world of “the new normal” …whenever that may be.
I’m also very aware that this type of content does not age well at the moment. My last post read about as dated as some of my “going out shirts”. Admittedly, I also fell into the category of people who a few weeks ago thought “this is just a nasty flu” …how wrong one can be.
Anyway, here’s some things to think about as we move through the coming weeks and months…
People need cars when circumstances change…And people’s circumstances will change considerably.
Each year Auto Trader conducts a car buying report with many thousands of car buyers. Something that comes out strongly every year is that changes in circumstances are often key triggers for buying a car, so how might circumstances change in light of COVID-19?
A baby boom…
You’re in lockdown. You’ve completed Netflix and Facebook twice over. So, what next? Well, sociologists have already predicted a dramatic increase in the number of babies conceived during the current lockdown. If life events are key triggers for buying a car, then few life events are more dramatic than a new arrival. Will there be a surge in people buying family cars and MPV’s?
Belt tightening…
I’m probably not the only one looking at my empty ISA at this troubling time and thinking “Chris, you probably should have saved more… maybe even saved something”. Luxury items suddenly look a little out of place and cars are one of the biggest status symbols you can own. I think in the coming months, less will become the new more. Car owners may choose to downsize and maybe choose to own and drive something a little less “look at me” in a make do and mend world. And even if they want to maintain a certain image, they might do it in different ways:
Could more used cars be purchased as car buyers look to step away from a new car PCP cycle?
Looking for more car for your money could prompt brand and model switches?
Committing to a long-term lease agreement might become a thing of the past, could short term PCH and different mobility solutions finally gain traction?
More home working…
Whilst I’m missing the human contact of a workplace, it’s been staggering to see how quickly companies are adjusting to new ways of working. The technology has always existed, but sometimes it takes a short, sharp shock to change business behaviours in the long term and we’ve certainly had one of those big shocks.
There will be people up and down the land realising that an awful lot can be achieved from home and in many cases, businesses can collaborate MORE effectively, and employees can use time more efficiently.
Am I the only person sat wondering if that 3-hour daily commute will really be necessary EVERY day in the future?
If we do see a rise in remote working, could it be the tipping point for an EV surge? I’ve already seen guidance from retailers that car owners of diesel vehicles need to be wary of a DPF blockage. Diesel cars have particulate filters that require regular long runs to ensure they operate efficiently and if they are only doing short journeys, the DPF can block and the engine can be damaged, sometimes beyond repair. If usage changes, vehicles might change too.
Even though EV’s are getting better all the time and vehicles like the new Mustang Mach E boast a 370-mile range (see Rory Reid’s review here) …will range be that important if journeys are shorter in a post virus world? I suspect we will see a surge in BEV vehicles on the other side of this.
Purchase distancing…and getting comfortable with Distance Selling
We’ve become all too familiar with new language and new words in the last few weeks. Social Distancing, Self-Isolation, Antigens and Antibodies but going quietly under the radar at this time is how we think about our interactions with retail…purchase distancing if you will. I’ve been shopping on Amazon for years and I certainly get my money’s worth out of my Prime membership. But in recent days I’ve purchased things I would have never considered buying 3 weeks ago.
So, many retail businesses are having to rapidly pivot their business models from face to face to delivery at speed. And if Bob my local butcher can do it – the automotive industry can too. There’s speculation that many lost retail jobs could end up working in logistics for the likes of Amazon. I think that would be a crying shame. But there’s a huge opportunity to repurpose your staff and take advantages of the opportunities online transactions and home delivery creates (when the time is right). Could Delivery Sales Executive or Purchase Optimiser be the hottest automotive jobs in 2021?
I think many consumers will want to buy local and support their own and I believe this will include car retailers. Just make sure you’re prepared to engage in a way that might quickly become commonplace for most purchases. Online retail is not just for the giants of digital, it can be for everyone. The technology is available, low cost and easy to implement.
All of the above is just conjecture and speculation, from a “fairly” educated point of view but, I’m often wrong and data is worth a thousand opinions. So, what can you derive from the data at this rapidly changing time?
Introducing AT Market Insight…
As of now, we’ve made a new market insight tool available to all customers. This will allow you to see emerging trends in Portal with more data than we’ve ever surfaced to customers before. AT Market Insight is a fairly self-explanatory tool (clue is in the title) it’s insight, on the automotive market.
It’s incredibly granular and will allow you to monitor and spot emerging trends using a plethora of filters all using “market health” our new metric for how the market is performing based on the filters you select, choose from:
Make
Model
Body type
Age
Fuel Type
Region (Local or national)
It’s not looking too pretty right now, but we thought that we should be transparent because this will be critical to helping inform your business decisions in the coming weeks. One thing we all know for sure is that we WILL get through this and the industry will come out of it ready to take advantage of the built-up demand. But the decisions you take each day whilst your forecourt is closed will be vital to your success when it reopens. Your forecourts may be closed, but your businesses continue to live, breath, attract and convert future buyers.
Check out AT Market Insight in Dealer Portal now. To access it from your Portal homepage, simply click ‘Analytics’ at the top of the page, followed by ‘Market Insight’.
Finally, remember to follow government advice at all times.
Stay Home. Protect the NHS. Save Lives.
Author: Chris Penny, Franchise Brand Director