ICDP's blog

As we approach the end of the year, and my last blog until January, it seems appropriate to look back at what we have experienced and what we have learned. My late friend and colleague, Martin Leach, warned against using the past to predict the future – he used to call it managing by looking in the rear view mirror – but if you are selective with your focus, you can hopefully pick out what is significant from what is transitory

I seem to be writing a lot of blogs related to dealers at the moment, but that’s because there’s a lot going on. The reduction of the number of dealer investors is well-established, leading to the emergence of the very large national and regional groups that have taken a growing market share in many markets.

Twenty years ago, Jim O’Neill, then an economist with Goldman Sachs, came up with the term ‘BRIC’ to represent four major economies that appeared to offer exceptional growth opportunities in the years ahead – Brazil, Russia, India and China.

Most people looking at the three company logos in this blog would perhaps, at best, recognise only that of Marshall Motor Holdings – the 6th largest UK dealer group, number 12 in Europe, and the only one which is a consumer-facing brand.

This week, we will publish our latest update of the European Car Distribution Handbook (ECDH) – the only source of information on the size and structure of franchised dealer sales and service networks on a pan-European basis.

When you read the headline, and if you’ve been keeping up with the news this week, you might have expected this blog to be about the Rivian stock market listing in New York last week.

The global car industry continues to struggle with supply in the face of the shortage of semi-conductors with extended lead times, restricted product offers and cancelled contracts. The casual observer might then expect this to lead to huge losses, slumping share prices and dealer investors rushing to leave the sector. But if anything, the opposite is true.

Given that the COP26 Climate Change Conference kicks off in Glasgow today, it seems to be the obvious topic for a blog today. Many of you may now be about to click on, some may have already done so when they saw the title and the image above, but I hope you will bear with me.

ICDP positions itself – and I hope is widely recognised by others as – the leading authority on the future of car distribution in Europe. We focus on the likely developments over the next decade, and how this will affect all players in the sector, whether sales or aftersales, new or used, franchised or independent sector.

When CarNext was established in 2017 as a subsidiary of Leaseplan – one of the largest leasing companies in Europe, focused mainly on the B2B market – we thought this could be a breakthrough development.

At a time when all the talk – in Europe at least – is about moving from franchise to agency as the best approach to enabling effective omni-channel retailing, it may seem odd to write a blog about the effects of going to agency, then changing your mind.

There have been a number of recent announcements about new or expanded subscription offers, including the announcement last week that Stellantis will launch its Free2Move service in the UK, and earlier in the month the launch of AutoAbo in Germany by VW offering young used ID models for minimum terms of three months.

Electric cars have been in the news headlines in the last couple weeks. The story that Sir Clive Sinclair – the inventor of the ZX Spectrum computer and the C5 electric vehicle (pictured) – had died probably got more coverage in the UK than elsewhere.

Life certainly never seems to be dull at Cazoo, the used car start-up that launched its used car proposition less than two years ago. Over that time, they claim to have sold a total of 20,000 used cars – around half the volume that the average of the Top 25 European dealer groups managed in a Covid-affected market in 2020.

There have been a number of occasions over the last few weeks when I have in some way had to consider how the many changes that we are seeing in the industry will affect the dealer business model.

Back from a week off on a ‘staycation’ in the UK having cancelled a planned trip to the Algarve due to the ongoing pandemic restrictions. As one of the news stories whilst we were away was the possibility that a local music festival had potentially been a ‘super-spreader’ event, I’m not sure that we made the right choice simply on those grounds

The quote “buy land, they’re not making it any more” is attributed to Mark Twain who died just as the motor industry was getting into its stride in 1910. However, his advice has been followed by car dealers around the world as they have bought property, and then invested in ever-larger premises, built to increasingly higher standards.

When discussing long term trends in the motor industry, sharing generally features alongside autonomy, connectivity and electrification – together making up the ‘ACES’ acronym. When discussing sharing, most attention is on start-ups in the field of micro-mobility schemes offering cars by the km or minute, such as Car2Go or Zipcar, some of which have been founded by the OEMs or attracted major investments from them.