Motor business consolidation continues in first half of 2023

In spite of a minimal growth in the economy, the retail motor business continues to consolidate with a forecast of even more activity in the second half of the year. Manufacturers’ consolidation is resulting in changes to their retail representation and already many dealers have been informed they will not be required in the new future.
Most manufacturers see the Tesla model, which only allows online purchases to retail buyers, as the way to increase profitability for the majority of manufacturers and the move to electric vehicles has given them the perfect opportunity to start this policy rolling.
There is little doubt car and commercial vehicle owners will find fewer sales and service points available to them, although the larger fleets and some other users will find mobile services and delivery and collection will be available for an additional charge.
At the same time, the used car disrupters like Cazoo, Cinch and Motorway are also attempting to move buyers to online purchases. However, Cazoo and the owners of Cinch, Constellation, who invested in retail operations throughout the country are now disposing of many of those retail sites to cut costs and exit new vehicle dealerships and agreements.
Even some of the UK’s largest retail motor groups have been acquired by European, American and South African businesses as they see opportunity to grow their businesses and profits. However, in the latest twist, Lookers, one of the UK’s largest dealers, who had recommended acceptance of a bid from a large Canadian automobile company had, to withdraw from the deal when their largest shareholder Cinch withdrew their letter of intent.
What does all this mean for you, the customer?
In theory, larger businesses mean cheaper costs because of their size and buying power but, as we have all seen with the supermarkets, this is not always the case. The amount of choice for the consumer is less and there is also the question of convenience for servicing and repairs.
Meanwhile, the Chinese who are now working hard to find established dealers to represent their brands, will have no shortage of takers as they seem to be happy to go along with the current model and continuing sales from these operations.
They can see what is happening and you will see more brands and more choice added to competitive prices, which will mean a major challenge to the traditional brands. There are those who believe brand loyalty will prevail but will the young buyers of the future be concerned, providing the product does the job when they need it.
The love for the motor car is dying fast, as towns and cities try to restrict access and make parking more expensive but there are still some people who spend a lot of time in a car and want certain things, and are prepared to pay extra for them. As I have said before, the next five years will be interesting.