AutoProtect Opportunities and Threats 2014
Date: Fri 7th March 2014 | Author: Vince Brand
David Shapiro - CEO - AutoProtect
At the end of 2013 AutoProtect were asked by Car Dealer Magazine to provide a perspective on the year ahead, with regard to the UK Car market. David Shapiro, C.E.O met with other industry influencers earlier in the year to discuss our thoughts on the opportunities and threats for 2014.
AutoProtect: "The industry must change due to new regulations"
What opportunities do you think 2014 will present?
The UK car market has been growing ahead of the general economy, and should that continue during 2014 consumer confidence will follow a similar pattern. However, the customer will remain ‘value-conscious’, which does not mean price exclusively. The dealer offer needs to be a wider one built around service, stepping beyond the car sale alone.
What do you regard as the biggest threat to the motor industry in 2014?
With the European economy still going through difficult times and the UK car market being second only to Germany, manufacturers will tend to think the UK is doing much better than it actually is. This could lead to an increase in already highly active pre-registration volumes. As yet, we cannot predict what the forthcoming FCA regulatory review will bring. However, as always, we recommend dealers support Treating Customers Fairly principles to avoid falling foul of regulations however they may change.
Are there any reasons to be cheerful in 2014?
Yes, plenty! To be candid, there always are; it is a matter of seeking the opportunities. In 2014, those opportunities will, as always, mean embracing change.
What are you most excited about in 2014?
Besides the World Cup? What are the chances of a good performance from England? If they do well it should have a positive effect on car sales. Workwise, I think the most dynamic area will be in F&I. As mentioned previously, I do believe the FCA regulatory review will cause a significant change in the way products are sold, and at AutoProtect we feel well prepared for this.
Can you see the current period of strong new car sales continuing? If so, for how long?
I think we will see continued growth but a likely reduction in manufacturer support. If the wider EU picks up its sales activity, we will see growth slow. I suspect the bonus structure will also shift in some brands away from volume. If, as suggested, a proportion of increased UK sales last year was due to PPI claim payouts and cheap financing, as these factors cease to have an impact, the rate of growth could slow down.
Do you think the motor industry needs to change and where should it come from?
Yes, it must change. New FCA regulations and an increase in digital usage by consumers make this a certainty. The battle to win consumers’ hearts and minds online will be vital, and this should lead to a different sort of marketing that is focused upon value creation rather than price and include a whole-ownership experience with options such as service plans.
What should dealers be focusing on to ensure growth and a sustained future in 2014?
Re-engineering their businesses around the consumer in a far deeper fashion than ever before. The focus should be upon making it easier for the customers to buy, rather than selling to them. For many in the industry this will be a sea change.
Supporting this, dealers must work to offer more than just car sales. Customer-relationship management is a central requirement.
