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Plus ça change, plus c'est la même chose…

No blog last week as we were in the midst of our virtual Spring Members’ Meeting (which worked well based on the feedback received), and returning to the keyboard now it would be tempting to focus on the immediate issues around the impact that Covid-19 is having on everyone – personally and from a business perspective.  I look in particular at the numbers coming out of Italy where the rate of deaths per day is still increasing, implying that things are going to get a lot worse there before the spread is brought under control.  My best wishes go out to my colleagues and friends there – stay safe.

Instead, I would like to consider a longer timeframe, as it is ten years since I joined ICDP.  Some of you have seen the notification produced by LinkedIn and sent congratulations – thank you to all who have done so.  In the context of our current projections out to 2030 – a decade forward – then it is interesting to consider what has changed over the last decade, and compare that with what we have flagged as being likely or needed over the next decade.

When I joined ICDP in 2010, all nations, industries, companies and individuals were still dealing with the effects of the Global Financial Crisis which had started 18 months earlier.  We had abandoned our CVInsight programme as the heavy truck manufacturers had a particularly torrid time.  Budget cuts meant that the car programme had only 26 members, split more or less equally between manufacturers, distributors/dealers and OES suppliers/service providers.  Other than one-to-one discussions, we shared the research  through two main meetings and four workshops.  The topics themselves are familiar – “The CO2 Debate”, “How cost, pricing, and value drive shifts in mobility”, “The evolving treatment of online channels under a new General Block Exemption”, “Strengthening the pyramid: improving profit of the new car selling system”, “The end of the mega-dealer dream: dealer groups in Europe” and “Modelling the EU aftermarket” are just a selection.

The topics that were considered important for future strategy then are therefore very similar to those that we still have on the agenda today.  It is difficult to see what would create a fundamental change in the future – environmental concerns will remain for as long as humans exist, we will always have individual and shared transport to meet our mobility needs and advocates of both, online will not go away and its adoption might be accelerated by current social distancing measures, businesses will always need to make profits and that will put pressures on their trading partners, and there will always be a need for aftersales even if the focus might become a pressure test on a hydrogen tank rather than an oil change.  Perhaps I lack imagination, but I do not see what the new big agenda item might be that would extend our coverage, even if the detail within each takes on a new focus.

What will evolve in the next decade in my view is much more around the scale of change, rather than the focus.  We have seen a reduction of 15% in the number of main dealer sales points, 13% in service points since 2010.  The reduction in the next decade will be larger, and a significant number of those will not be franchised dealers but sales agents.  ICDP’s view on the value and potential of dealer groups has changed in their favour, and that remains our view over the next decade.  2010 saw the launch of the first volume BEVs (Mitsubishi i-MiEV and Nissan Leaf) and Tesla only offered the Lotus-Elise based Roadster.  By 2030 every manufacturer will offer BEVs, some will have switched completely and it is unlikely that you will be able to buy a pure ICE car in any developed market.  The current BER review process will determine the regulatory environment that we will operate in for sales and aftersales beyond 2030, but how different players work within those restrictions will, we think, be more varied than in the past.  In the aftermarket space, we have laid our thoughts out in detail in the imminent “Aftermarket of Tomorrow” report, but without spoiling the story, we do not anticipate that any type of player who was here in 2010 or 2020 will have ceased to exist or be in terminal decline by 2030.

The story therefore is that whilst the pace of change will accelerate, and some specific changes will represent a fundamental change in business model and/or behaviours, the content of ICDP meetings in 2030 will most likely have a familiar ring, covering similar topics but from potentially quite different starting points.

Steve Young