The crisis linked to the international pandemic has a drastic impact on the auto sector. 70% of dealers report having a drop in orders while 62% show insufficient turnout at the sales halls. But, even before the Covid effect, dealers found themselves having to manage a strong change in consumers and their habits with respect to the use of transport and service expectations.
If in 2009 (the first year of market crisis after the all-time high of 2007), there were 2,574 dealers, in 2019 they were 1,390. The sales networks have changed their configuration, giving rise to a strong concentration: today there are fewer operators, but larger and multi-brand. A path also followed by the builders.
Even before the pandemic, the car market was definitely slowing down. In this alternation of stop-and-go, the sector feels the blow further. Technological evolution helps operators to diversify their value proposition and not to lose the quality of their relationships.
The auto market was in crisis even before the pandemic. But the persistence of the emergency has led to a market collapse that puts at least one in five current car dealerships at risk. According to the latest Automotive Dealer Report, the forecasts for the sales networks are alarming, with market drops of 40%. Dealer bankruptcies are estimated in the order of 30-40% and there is a forecast that closures could double, despite the actions taken by car manufacturers to support.
Their sales and assistance networks and the measures (layoffs, loan guarantees, and so on) provided for by the various emergency decrees and while assuming that the net working capital does not increase and indeed decreases (i.e. that the credits and, above all, product stocks are dwindling). The forecasts are dire: analysts hypothesize a further collapse, after the halving recorded in the last decade.
Considering how the decision-making process now takes place mostly online, it follows that the dealerships must make an effort towards digitalization, now mandatory, by learning to manage an ecosystem of data and processes to combine online and offline in a single solution of continuity.
Nowadays, if a dealer does not manage leads well or is not visible online, they risk jeopardizing up to 15% of their sales, and moreover, within 3 or 4 years, this percentage could rise up to 30. % and radically compromise the activity of a dealer, until closing. A change in the mentality of the sector is necessary which, thanks to the cloud, advanced analytics, and advanced collaborative platforms, can accelerate all its innovation paths.
In this white paper you will find an in-depth examination of the trends that impact the car dealer network and, in particular:
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