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Future Strategy

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I was asked to address the senior management team of a major dealer group recently on what they should be thinking about in the context of their future strategy.  These are the eight points that I covered.

1. The rest of the world is moving faster than automotive distribution and retail – consumers are exposed to this every day and will soon push for change, or find new ways to meet their mobility needs
2. Major changes will hit automotive retail within the lifetime of a new dealership – we call this the “property timebomb” and it risks hurting dealers’ balance sheets and their creditworthiness
3. Many OEMs demonstrate a split personality – new channel formats are piloted and lauded, at the same time that more investment is called for in the old formats
4. Dealers are therefore “between a rock and a hard place”, but wait and see is not an option – they cannot wait for directions from the OEMs
5. Dealers need their own plan and start implementation now – building new capabilities, and protecting the business from disruptive forces
6. Digital will be the main disruptive force – dealers must prepare in terms of how they communicate and how they work, but this is as much about people as it is about technology
7. Investments must be flexible – property and technology needs will change, business cases need to recognise this
8. As has always been the case, performance will still be driven by people and processes – these should still take a high priority, and not be forgotten in the fascination with the new

Dealers should consider whether their current strategies recognise these points; OEMs should consider whether their network strategies accommodate the needs and risks of their dealer partners on whom they depend today, and will continue to depend on – at least in part – in the future.

Written by Steve Young

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