In our fortnightly interview series, Under the Bonnet, we seek out the opinions of movers and shakers in the used-car market – those that have been there, done it and got the oil-stained t-shirt. From leading car dealers, to manufacturers and top finance brokers, we get under the bonnet to discuss the news, views and market trends that are shaping our industry’s future.
In this week’s instalment we speak to Trade Price Cars’ Business Manager, Graham Westwood, about the shifting landscape for car dealers, the increasing influence that some of the big car advertising sites have on the market, and how the digital revolution is pushing everyone to up their game.
In what ways has your dealership evolved in the last few years? What’s the biggest change you have noticed?
One of the biggest problems with the industry is the increasing advertising costs of car search websites, because they have such an influence over consumer confidence. It’s pretty much a customer’s first port of call prior to buying a car – and given their control on the marketplace that is a concern. It’s increasingly problematic because they charge so much for being on there.
If car dealers can’t afford to be on those sites, because the monthly advertising bills are huge and unsustainable, then you are going to get swallowed up. And that’s what’s happening at the moment; the smaller dealers are going under and larger dealers are taking a bigger share of the market.
What does the future for car dealerships hold?
Transparency is the key word in the motor industry at the moment – if you can be a transparent dealer then you get a lot of repeat customers. Consumers want to be informed as to what the dealer is like before they come in.
So now we’re sending customers personalised videos and it’s a much more live, real-time experience. Everything is becoming more and more online. There will come a point where you won’t even need salesmen, people will just buy cars on websites and it will be our job to get the cars prepped and hand them over.
Does the gradual move online concern you? If so, why?
If Amazon did decide to come into the car market they would really challenge the whole industry because they are so seamless in how they do everything. If you were to create a process like theirs it would change everything. Not overnight but certainly it would unsettle the status quo without a shadow of a doubt.
Is the introduction of autonomous and electric vehicles a challenge or an opportunity for the UK car dealing community?
The thing with EVs is a few car dealers have aligned themselves with the whole Tesla model but if you do a lot of research into the batteries there’s a lot of people who aren’t entirely sure about them at the moment. It’s whether or not the electric car is going to be the next big thing or whether it’s going to be hydrogen cars.
Is the uncertainty over Brexit having an impact on your forecourt footfall?
I think it will take two or three years to fully know what the impact on various markets will be, but people will always need cars – it’s how most of us get to work.
But even though we had a record month in January, car dealers are getting squeezed in every area. Advertising costs are going up; advertising companies are needing to earn more money, so they’re charging us more. Pricing is critical and it’s crucial for us to get the balance right to meet the rising overheads.
In what ways does Oodle support you?
As one of Oodle’s very first dealers, we’ve totally bought into what they’re doing. Oodle is a very technology driven company that allow us to engage with customers in a very different way, compared to lenders. They’re really supportive and always willing to look beyond the ‘yes’ or ‘no’ answer, and I think they’re going to become one of the biggest lenders. They look at the grey areas and support where they can, which is a huge benefit to our business. Most importantly, they’re always willing to listen, evolve and learn.