Automotive COVID-19 Recovery Series: Automotive Retail
As most countries are coming out of lockdowns and markets are adapting to the 'new normal', automotive retailing is no longer the same as six months ago. The COVID-19 pandemic had a lasting impact on consumer behavior and drastically accelerates what was unavoidable — the transformation of automotive retail.
Three effects are coming together, which are going to lead to a significant dealer consolidation, increase of buy-sell activities, and reduction of rooftops in the next years:
- Unprecedented standstill of the automotive industry exacerbated the strain on dealer profitability, which has been facing reduced margins and increased competition prior to the pandemic.
- Social distancing has led to an accelerated digitization of the customer journey, as shopping, research, and part of the transaction have shifted to online meaning fewer walk-in consumers and decreasing relevance of stationary touchpoints and brick and mortar.
- Major global auto manufacturers (OEMs) are shifting towards direct sales models in response to changing consumer expectations and retail network cost structures. OEM-forced consolidations will only add additional pressure to the conventional dealer model and continued OEM mergers will create multi-brand networks — an opportunity to improve cost sharing and efficiencies
The third installment of IHS Markit's new Automotive COVID-19 Recovery Series is now available. In our whitepaper; Automotive Retail, we addresses the impact of the pandemic on consumer behavior and how mobility shifts have influenced dealer standards and capacity, dealer profitability models, OEM changing views on legislation, and the role of dealers in the future. Research and insights into these accelerating trends will highlight the alterations automotive manufacturers and dealers must make in the short term to survive these trying times, as well as the longer-term strategies to enact to ensure prosperity going forward.
This whitepaper is one of three whitepapers produced for our COVID-19 Recovery Series.
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