What does the future hold for the Motor sector?
January 30, 2018
According to our MHA Motor Report, 94% of respondents believe that on-line vehicle sales will be integral in the future car purchasing model. Of those positive respondents, 63% believe that this will be within a five year period. We are all aware that consumer purchasing habits, not just in the motor sector, are changing right now, with a requirement for bespoke products tailored to the individual. Buying options have evolved from the straight out purchase and can now involve a subscription basis, car sharing or potentially driverless car scenarios. Whilst the forecast timeline may be five years, preparation and anticipation is required now and business owners should be asking themselves various questions in readiness.
Are your sales team prepared? The upcoming generation of vehicle purchasers are not interested in trailing around dealerships – when they do visit the showroom they will have already done their research electronically. The majority of initial enquiries about a vehicle, new or used, will be online and if that enquiry is not responded to quickly enough, the sale can easily be lost at that point. The use of video has become increasingly popular in the sales process to show off the vehicle and it’s attributes – do your sales team research the buyer to ensure the salient features they are highlighting meets that person’s objectives ?
Is your technology up to date or do you need to invest now? Whilst it is unlikely that physical dealerships will disappear altogether in the near future, online retailing needs to complement the tangible offering. Technology is ever evolving and it is important to invest in order to remain competitive. There may be tax reliefs available for such investment to reduce the cost impact and researching grants and funding for training is recommended.
What if physical dealerships are no longer needed or a smaller scale presence is required? Do you own your property? What will you do with it? If rented, when is the next break clause and what are the financial implications? If owned, is sale or onward rental an option – does it need capital investment now? Each answer will have different ramifications and impact upon cash flow. If significant capital investment is required this will need careful planning – remember to ensure capex is carried out in the most tax efficient manner, making best use of available allowances. Consider staggering significant projects over tax years if cash flow and trading allow. Seek professional advice early during a property sale or purchase to avoid pitfalls further down the line – often taxes that have been overlooked until the eleventh hour can hinder a transaction.
The dealership of the future will undoubtedly have a different look and feel than that today and it is vital that business owners begin to consider the financial and physical impacts early.
If you would like to discuss what the future holds for the motor sector, or you would like to speak with a member of our team, please contact Ginni Cooper or call 01772 821021 to be put in touch with a member of our Motor team.