The automotive distribution research group, the ICDP has published a report entitled the ‘European Dealer of Tomorrow’ in which it sets out its vision of the future of car distribution and retailing.

Based on new research and consolidation of previous studies, the new report says that while dealers may remain relevant, there are serious issues with the current distribution model and overall numbers are likely to decrease especially in the mid-size sector. It also believes the relationship between sales and aftersales will become more fragmented.

 ICDP’s European research programme was launched over 25 years ago with the primary objective of identifying a more effective way of distributing cars than the model which has been in place now for a century. The ICDP says the current model is operated with inherent inefficiencies in the supply chain driving sub-optimal solutions.  It depends on cross-subsidy of the new car sales business from aftersales and in some markets from used cars. It also creates tensions between dealers and manufacturers and dealers and customers. 

The report stresses that their needs to be less emphasis on the sales “deal” and in the future rather than making a physical sale, the dealer is far more likely to be signing up a customer for a service in return for a regular payment.  This will mean that the traditional dealership model must adapt to survive.

The report also suggests that OEMs will play an increasing role in the sector, moving away from the traditional model, especially with sub-brands and e-commerce will inevitably have more influence. However, it does stress that few buyers want a totally on-line buying experience.

Report author, Steve Young, said, “We do see a lot of change ahead for dealers and not all will survive. However, the demand from consumers for a physical network will continue, even though the role of that network will change.” He added, “We also anticipate more separation of sales and service points in franchised dealer networks, with the possibility that more points would be authorised repairers rather than owned and operated by the franchised dealer. This could translate into even less interest from dealers in running their own bodyshops.”

The full report is available at www.icdp.net