Reduction in dealer network across Europe predicted

September 22, 2016

There are increasing threats to the viability of European dealer networks that could lead to a substantial reduction in the number of outlets over the coming years, a new report warns. According to the ICDP, a specialist automotive research firm, networks will come under pressure as manufacturers respond to changing customer behaviour which reduces the number of dealership visits and demand for aftersales service. The report identifies a range of factors behind a reduced need for traditional main dealer sales outlets. Firstly, customers are demanding more local solutions for vehicle sales and aftersales or the offer of delivery and collection, which reduces the benefits of investing in a substantial dealer showroom. Secondly, footfall at main dealers is being reduced because buyers increasingly browse online instead of visiting a showroom and the need for aftersales visits is falling as vehicle reliability improves. With the increasing use of electric vehicles, which are almost maintenance-free, dealer traffic could fall even further. As a result, dealers will need to find new ways to display product and drive brand awareness without the costs associated with a major dealership. This would include pop-up stores, shopping mall outlets and improved online channels. Although the overall number of dealers in Europe has been declining in recent years, the ICDP believes it is not on the scale required to meet these challenges...

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March 31, 2017

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