Analysts: Most Car Dealers In Europe Must Wind Up Their Business
Car dealers across Europe expect significant reductions – otherwise they just can’t survive. This conclusion was made by researchers from the international center for the study of automotive distribution ICDP.
A report published by ICDP states that car sales networks in Europe have been declining for the 11th year in a row, and service networks are declining for the 9th year, but that’s not enough, Moto Trader writes. So far, dealer networks have declined by only 16 percent over the past 10 years, despite the increasing pressure from new distribution methods and channels, including the Internet.
Also, the development of car sharing is putting significant pressure on the traditional car market, which leads to a further drop in retail sales. According to ICDP, one of the ways to survive can be a further separation of sales and service, as well as a greater variety of forms of service.
Of course, the size of the required reduction in dealer networks is highly dependent on the specific market. For example, Germany is crowded with car dealers, they have the lowest rates per one point of sale, while, for example, similar numbers are twice as high in the UK.
In general, the car market is currently experiencing a very predictable long period of decline after a record year 2018. Most likely, experts forecast, the market will never return to last year’s level with its nearly one hundred million new cars sold.
There are many reasons. The most significant ones are the massive emergence of electric vehicles, the “digitalization » of everything, including direct sales via the Internet, and the development of alternative ways to use cars, that is, subscriptions, car sharing, and so on. All this significantly reduces the income of both the automotive retailer and service networks.