The French automotive manufacturing PSA Group, which purchased both the Vauxhall and Opel marques in November 2017, has ended its retail network contractsas part of a major restructuring process. It doesn’t seem so long ago that Simon Oldfield, Vauxhall’s marketing director described their 2017 Isn’t Life Brilliantbranding slogan as “…More than a feeling, it’s an attitude we embrace…” For time-honoured dealerships that feeling could be one of gloom. As we surmised earlier this yearthe days of the familiar car forecourt are numbered.
What is driving the changes?
Internet retailing is part of the core strategy for most successful retailers and it’s not hard to see why:
- Ease of access 24 hours a day, 365 days of the year.
- A responsive website enables customers to consider and refine their choices before they come anywhere near a sales channel.
- A consistent and (hopefully!) high-quality customer service experience.
- Most of the communications can be automated, reducing overheads.
- The millennial generation (first identified in 1987!) doesn’t just purchase; they have an experiential retail experience, with or without VR / AR – something bricks-and-mortar car dealerships have struggled to deliver. Even non-millennials expectto see everything available online – including funerals.
- Diesel car sales, once the mainstay of established dealerships, have underperformed for 12 months with April’s sales at -40% (vs April-2017) and reduced market share to just 32% of new car sales.
- Personal Contract Purchasing (PCP) has been a hugely profitable revenue stream for dealerships, but the Financial Control Authority has expressed concerns over financing governance and commissions. Much like the drug of the same name, PCP users can suffer anxiety, high blood pressure and a feeling of impending doom.
Is this the beginning of Motor Retailing 2.0?
Rockar’s in-store collaboration with Next has reimagined how cars can be positioned and sold. After all, a car is as much a lifestyle purchase as a suit or a brand of cereal. The consumer data is already out there, waiting to be segmented and profiled.
Vauxhall’s termination of its network contracts sends a clear signal to competitors: we are doing things differently – what are you going to do? In such an innovative industry, where technology is at the forefront of car design and manufacture, it would be illogicalnot to expect the retail experience to move up a gear. Don’t worry; we’ll still need a human sales force for the time being!!