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Car dealer decline among predictions of KPMG survey

Date: 19 January 2018   |   Author: Sean Keywood

Car dealers and car makers could be set for dramatic changes if the predictions of industry leaders come to fruition.

The KPMG Global Automotive Executive Survey found that 75% of UK automotive executives think that 20-50% of brick-and-mortar dealerships will no longer exist by 2025.

The wide-ranging survey also found that 63% of UK automotive executives believe that by 2030 the global share of vehicles manufactured in Western Europe will drop to less than 5%.

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."

Regarding the predicted fall in Western European car manufacturing, Benson added:

"Whilst it sounds dire, the truth is that sustainable growth can only be generated in Asia, based on current market forecasts, and this is reflected by the opinions of UK automotive executives, and Western Europe is home to numerous premium brands."

On the subject of whether or not, in the face of bad emissions publicity, diesel cars still have a future, executives were undecided, with 50% still believing that diesel is a technologically viable option.

The survey also found that 75% of UK automotive executives believe that data will be key for their future business models, with the market potentially shifting towards autonomous vehicles.

Benson said: "Electric vehicles, autonomous vehicles and Mobility as a Service 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."