Are retailers at risk of depletion?
Almost half of all car dealerships will disappear in less than a decade, according to KPMG’s Global Automotive Executive Survey 2018. The survey found that 75% of UK automotive executives think that 20-50% of the brick-and-mortar retailers will no longer exist by 2025.
Justin Benson, UK head of automotive at KPMG said, ‘The majority of UK automotive executives are convinced that the only means for dealers to survive is by restructuring into a service factory or a used car hub in the future. This is certainly a warning sign for physical retailers and presents a need to rethink retail concepts and business models, particularly with customers purchasing more of their goods and services at the touch of a button.’
With millions of consumers taking advantage of financing options such as contract hire and personal contract plans (PCP), 61% of UK automotive executives believe that issues around vehicle financing may become a concern due to lower residual values.
The report findings also revealed that 63% of UK automotive executives believe that by 2030, the global share of vehicles manufactured in Western Europe will drop significantly to less than 5 per cent.
Three out of four consumers highlighted data and cyber security as a prerequisite for their purchasing decision, suggesting that the companies who fail to provide this will suffer severe consequences. 75% of UK automotive executives think that data is going to be the fuel for the future business model of automotive companies, as the shift towards an autonomous vehicle future accelerates.
‘In the UK, our findings are clear on one thing, there are more significant disruptors to the automotive sector than Brexit. Electric vehicles, autonomous vehicles and Mobility as a Service (MaaS) are going to drive change in the automotive sector for the foreseeable future. New business structures and new economic models are on the horizon, driven by these disruptors and the associated new technology. It’s an exciting but uncertain time for the industry. Whilst our report highlights concerns in some of its conclusions, it also helps chart a path to future success.’ said Benson.