Motor Trade Monthly Round Up September 2016 News

All you need to know from the month of September.

Things You Need To Know

The automotive sector has ranked last for customer service for the second year running, in consultancy firm, Engine’s annual Customer Experience Survey. Customers saying ‘automotive was among the best for service’ has dropped from 12.2% to 9.5%. The Co-Founder of Engine, Oliver King, commented on the findings: Why is automotive finding it so difficult to improve their customer service perception? The problem is that retail staff are working to traditional sales and after-sales processes, often created by siloed teams within manufacturers and groups, which no longer reflect the way people buy and service cars. Customer’s service expectations have evolved dramatically in line with innovative concepts in the high street and online. They're used to multi-channel retail experiences but automotive is stuck in a linear model in a non-linear world. Consequently, they can’t meet customers' current expectations and preferences.”

RAC say their Approved Dealer Network of 250 used car dealerships is predicted to sell 50,000 cars during 2016 and will grow to 350 by the New Year. The Director for corporate and independent dealers at the Warranty Group (RAC’s dealer sector partner), Sean Kent, said: “With the RAC Approved Dealer Network and RAC BuySure, we set out to create a national used car initiative that had high appeal for both buyers and dealers. With the level of sales that we are now seeing and the size of the network itself, we feel that we are well on the way to achieving that target. It is very much a success story for the RAC and for the dealers involved.”

Brexit

It’s too soon to judge the impact of Brexit on auto retail in the UK according to Chris Bosworth, the Director Strategy at Close Brother Motor Finance. This comes in the wake of SMMT UK Registration Figures indicating small growth in July. Classifieds website, Motors.co.uk, has said that most car buyers remain undeterred by the Brexit vote. According to their 2016 Car Buyer Survey, only 3% said they were discouraged from buying a new car due to the decision to leave the EU, and only one in 10 people said the referendum result has affected the time of their next car purchased.

VW Emissions Scandal

German car manufacturer Volkswagen were blasted in mid-September after it was revealed it had failed to fix cheating emission software in over a million UK cars. In 2015 VW vowed to have the 1.2 million affected cars corrected by January, but only 110,000 have so far been fixed. Labour’s Transport Select Committee chair, Louise Ellman, said: “One year on from the emissions scandal, nine out of 10 drivers are still waiting for recalls."This is simply unacceptable. Paul Willis, VW UK’s managing director, ­promised us that VW drivers could expect to have their cars fixed by the end of this year. It’s time VW came clean with customers. If it refuses to do so, the Government must act.” Volkswagen UK said: “We’re working to apply technical measures to as many cars as swiftly as possible.”

What You Need To Know

Wizzle, the direct-to-dealer sales service from AUTOi, has found that in general, consumers are willing to accept values between CAP Average and CAP Below even for cleaner cars. Wizzle founder, AUTOi’s Sébastien Duval, said: “Our experience so far goes against the received wisdom in the trade that today’s consumers are extremely savvy on the value of their car and determined to get the best possible price. We expected our main hurdle would be people having unrealistically high expectations around the value of their car. But the experience of our first six weeks of trading suggests that convenience and a good experience of the process may be even more important than the final price. Wizzle is primarily pitched to dealers as a source of clearly described quality stock they can feel safe to bid on rather than just a channel for cheap cars. But consumers using the service so far have been satisfied with values somewhere between CAP Average and Below, even for clean cars.”

According to Dragon2000, dealers that aren’t sending walk around sales videos to prospective buyers are missing out on sales. Commercial Manager at Dragon2000, Mark Kelland, said: “Car buyers today are savvy and carry out research online before making a decision. Good video lets them check out vehicles in a familiar, engaging format. Video content is the most effective way that dealers can connect with potential buyers. To give prospective customers a ‘virtual walk-around’ tour of the car, has the potential of shortening the sales process and increasing the chances of conversion. Using video, where a salesperson introduces themselves and the car to a potential customer, increases trust and engagement, far more than an email, or phone call. It is a step in the sales process to get the customer to visit the dealership, or to aid their decision to buy the car without seeing it ‘in the flesh’, as the video should show them the true condition as the salesperson presents the car.”

Not offering finance online could be hampering your business, according to iVendi CEO, James Tew, commenting on stats from Google which show that 71% of customers want to finance online, he said: “Many dealers in this position believe that they will not lose a significant amount of their motor finance. I suppose the managers of other businesses such as Kodak and Comet whose markets were disrupted by digital innovation felt the same. The fact is that if you do not offer an integrated, online motor finance on your web site, there is a good chance that your customers are looking elsewhere for their finance needs.“