Car dealerships on track to disappear as vehicle sales move online

The AA doesn’t believe car dealerships will die out completely

Perusing the shiny motors on a car dealership’s forecourt is set to be a thing of the past, with a study of British auto execs suggesting most dealerships will disappear over the coming decade.

KPMG’s Global Automotive Executive Survey for 2018 shows that three quarters (75%) of the 907 executives polled think almost half of showrooms will no longer exist by 2025, amid a move to online auto shopping.

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.”

Shift in buying behaviours

Although many use the internet to window shop, when it comes to taking the plunge, online car transactions haven’t seen a massive take-up to date.

In response, some manufacturers are looking at new ways to encourage online car shopping, and some businesses are looking to cash in on the anticipated trend.

Carwow is a website that allows car shoppers to buy new motors from franchise dealers.

The company’s Chief Executive James Hind says the motoring industry is undergoing a period of significant change.

He continues: “We all know that the way the public shop has changed. Consumers expect a convenient, frictionless, fair and transparent experience as standard, in all sectors.

“The growth of Carwow and other online car buying services is evidence of the shift in buying behaviours. However, there is definitely a place for dealerships in the future, even if the forecourts will look a little different to today.”

An end to traditional shopping for cars?

Even with a shake-up of the industry, it’s unlikely auto dealerships will die out completely.

“In our view the car dealers won’t disappear, but they will get smarter and their working methods will change,” says AA President Edmund King.

He believes the majority of shoppers will always want to “see, touch, smell, hear and drive their potential purchases” before taking the plunge.

He added: “After all the car is the second biggest purchase most people make after their home.”

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