ICDP's blog

Interesting news this morning which has ramifications beyond the UK concerning Pendragon, ranked the seventh largest dealer group in Europe in our 2022 rankings.  The business has been ‘in play’ for some years, since the Hedin Group first bought a stake in 2019, subsequently attracting formal offers from both Hedin and Lithia.

I was in Munich at the start of this week, unfortunately fully immersed in client work and unable to actually visit the IAA Mobility Show that has taken over the traditional Frankfurt Motor Show slot in the calendar.  However, I got some flavour of it through some side-meetings, exhibits that were on the streets in the city centre and obviously the press coverage.

A couple weeks ago, the UK Independent Automotive Aftermarket Federation (IAAF) signed up to the global Right to Repair movement’s position statement which promotes fair and open competition, and regulation rather than voluntary codes to force access to repair and maintenance information.

I was speaking at a UK event last week and was asked a question about the impact of the Zero Emissions Vehicle Mandate – the UK legislation that will enforce 100% zero emissions car sales by 2030, five years ahead of the equivalent enforcement date in the EU. 

I recorded a podcast last week, when one of the discussion topics was the recently announced cuts to the Renault UK dealer network of around 20% from 144 franchise points to 115, a move that has attracted descriptions like “radical” and “slashing”. 

I'm just kicking off a new workstream as part of the ICDP research programme focused on used cars and in particular looking at why some dealers can regularly outperform others even when the basic principles of how to be a great used car dealer are well known.  Within that statement I recognise that I'm already making some assumptions.

It’s not deliberate that I link the blog to Tesla for the second week running, but there’s always a lot going on when Elon Musk doesn’t apply a filter to any of his comments.  Last week, Tesla announced their second quarter results with the key highlights being a 10% core automotive operating margin despite the succession of price cuts, volume ambition this year of 1.8 million (double those achieved in 2021!), and a promised start of production date for the Cybertruck in the final quarter of this year. 

Over the last few months, price cuts seem to have been a consistent theme in the headlines.  Arguably kicked off by Tesla in the last quarter of 2022, other manufacturers jumped in (or were dragged), leading to an extended period where headline prices have been adjusted by 10% or more on a regular basis. 

In some amazingly rare alignment of the stars this week, three wise men of the automotive consulting world had similar thoughts on the same topic.  Given that those three wise (arguable) men would at one time have been competing for big ticket jobs from the global OEMs, trying to establish differentiated positions, this is quite significant, a bit like trying to get a consistent view from three economists.

In the tale of King Canute (King of England, Denmark and Norway in the eleventh century interestingly) he set up his throne on the beach in the face of the incoming tide in order to demonstrate that even Kings had limits to their powers.  However much he was respected by his courtiers and subjects, he could not hold back the tide, so he did get his feet wet.  We face a different tide now in the shape of the Chinese car manufacturers, a topic that is perhaps second only to agency in discussions that I have with car dealers in Europe.

BEV charging seems to be in the news at the moment.  The British comedy actor Rowan Atkinson attracted attention with a column in the Guardian newspaper suggesting that he had been duped into buying a BEV by incomplete environmental analyses, but also commented on unsatisfactory charging experiences.

I’m on holiday in the Algarve at the moment, so wasn’t really planning on a blog this week, but one thing struck me on the way from the airport, and subsequently driving round in my rental car.  (Opel Corsa, very nice drive, well equipped by the way)

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.