ICDP's blog

Omni-channel retail seems to be back in the news again in automotive circles.  This week the UK marketplace AutoTrader will publish a new report in conjunction with ourselves and the NFDA looking at the readiness of UK franchised and independent dealers to operate in an omnichannel world. 

Over the last three years, since both manufacturers and dealers discovered that they can make more money by selling fewer cars, we have been assured that lessons had been learned and that we would not return to the bad old days of oversupply.

My blog is again a little late this week, but it has given me the opportunity to pick up some inspiration from the Automotive Dealer Days, organised each year by our friends and partners at Quintegia in the beautiful city of Verona.  With an attendance of over 5,000 people this year, it is the largest dealer event in Europe, and next year they hope to expand and increase the international coverage.  May 14-16, 2024 – get the dates in your diary now!

Yesterday we held a webinar for our research programme members looking at dealer consolidation in Europe and in particular what was going on in respect of cross-border deals. The consolidation trends creating ever larger groups with a higher domestic market share is well established and in some markets like France, Netherlands and the UK, the share held by the top 50 groups exceeds 50%.

General Motors surprised everyone I think last week with the announcement that they were axing Apple CarPlay on their electric vehicles from 2025.  For a number of years including CarPlay and Android Auto connectivity in a car has been seen by manufacturers as something over which they have no choice given the dominance of Apple and Android smart phones with their customers.

Car subscription models have been gaining popularity in recent years as an alternative to traditional car ownership.  The idea behind car subscriptions is that instead of buying a car outright, you pay a monthly fee to have access to a car or a fleet of cars.  The subscription typically includes all the costs associated with owning a car, such as insurance, maintenance, and repairs.

My blog is again a couple days late this week, but it does provide an opportunity to see the headlines from the Shanghai Auto Show with the press days scheduled on Tuesday and Wednesday this week.  Whilst auto shows in Europe are in decline and looking to reinvent themselves with new formats, venues and focus, the Chinese still put on auto shows like they used to be - on a grand scale and with the focus on product.

Writing this after a four day holiday weekend in the UK, when I had the chance to more or less put work to one side and do other things, it would be easy to start thinking about the options of everyday being a holiday and retiring or at least slowing down on the work front.

I have long been enthusiastic for an automotive business model based on usage rather than ownership, primarily coming from the viewpoint of the potential to maximise the profits derived from a car over its lifetime.

The news last week that an agreement had been reached between the European Commission, Germany and other interested parties who had raised last minute protests about the ICE ban from 2035, might be interpreted as a U-turn. 

As expected the deal was finalised last week for the acquisition of UK based dealer group Jardine Motors by Lithia of the US.  It is anticipated that the coming months will see more activity by Lithia as they seek to expand their UK footprint from the upper premium focus that Jardine currently has.

The last few days have been busy for ICDP as we prepare for our spring members meeting in Berlin this week.  At this point in the year we are wrapping up a number of research streams before launching out with the new programme activity starting in April.  The spring meeting is therefore a ‘best of the best’ recap and an opportunity to look back at what has emerged over the last 12 months, some of which we anticipated, some of which is new or at least of a different magnitude.

Before Christmas we saw headlines from around the world as Tesla cut prices dramatically in order to stimulate sales before the year end.  This achieved the desired result for Tesla of getting close to their previously declared shipment target for the quarter, but also attracted negative headlines from customers who had recently purchased at the original price and from those in the motor trade who had used Teslas in inventory which now had to be written down in value.

The title of my blog is not intended to suggest that there is anything about Chinese cars that you need to brace yourself for in terms of the driving or ownership experience.  On the contrary the quality and general competitiveness of cars coming from the major Chinese manufacturers now appear to be on a par with European volume brands.

I do try to keep the topics of my blogs varied, covering the whole spectrum of ICDP research and the various conversations that I have around not only sales but also aftersales and other related areas such as mobility.

Following on from the news a couple weeks ago that the second largest dealer group in the US, Lithia Motors, was in discussions to acquire the UK group Jardine Motors, statutory filings revealed that TDR Capital, directly and through subsidiaries, had acquired over 3% of #4 UK dealer group Vertu.

I had a sense of déjà vu reading an article in Autocar magazine last week by Hilton Holloway (unfortunately no online link available) describing a concept that would allow an ICE car to be repetitively leased and refurbished by the manufacturer with a planned life cycle of up to 25 years.

I struggled a little bit this week to pick the topic for the blog.  There are some obvious options around more restructuring at Cazoo and more delays to agency rollouts in Europe.  It's also interesting to see a change in the arrangements between Renault and Nissan as yet another illustration of how the globalisation of the last 30 years seems to be reversing.

As a child I went to Sunday School and recall to this day being told the cautionary tale from the Bible of the foolish man who built his house on the sand.  The other half of the tale said that the wise man would build his house on rock.

We all know that the Tesla roadster which Elon Musk fired into space in 2018 will at some point come back through the atmosphere and crash and burn.  However that is estimated to happen in millions of years whereas investors and the automotive industry at large are much more interested in what's going to happen to Tesla as a company over the next two or three years.