Lessons from Norway’s more mature EV market show that falling workshop traffic, weaker loyalty and rising competition are already reshaping dealership economics, forcing dealerships with foresight to rethink retention before margins come under pressure.
Dealerships that fail to rethink retention strategies in an EV-led market risk eroding long-term profitability with evidence from Norway suggesting the impact might be each structural and difficult to reverse.
Insights shared by automotive retail expert Glenn Mercer indicate that electrification shouldn’t be simply changing what dealers sell but how they sustain customer relationships and generate profit over the long term.
“Retention is more worthwhile than ever, it’s under threat and inaction might be costly,” the US-based analyst (pictured) said at Autotrader’s recent Road Ahead conference.
Within the UK, where brand allegiance is already low and dealer loyalties proceed to melt, the shift to EVs is accelerating a move towards a more fragmented, less predictable customer base.
Autotrader estimates loyalty rates have fallen from around 41% to 36% in recent times and are expected to say no further as more consumers switch between brands and powertrains.
With as much as 90 brands forecast to compete within the UK market by the top of the last decade, roughly double the number firstly of the 2020s, competition for every customer is intensifying throughout the entire of the ownership lifecycle.
“The more we transition towards electrified technologies, the more likely it’s that customers will move into different solutions,” Mercer warns.
For dealers, the implication is evident: the normal model, built because it is on repeat servicing and predictable lifecycle events, is weakening. Retention can not be assumed and must as an alternative be actively rebuilt across the shopper journey.
Retention under pressure
In doing this, Mercer argues that retention must now be approached as a multi-layered strategy spanning part exchange, the following vehicle sale and the all-important aftersales with the latter remaining the economic engine of the dealership.
That is reflected within the financials of major dealer groups where parts and repair proceed to account for a disproportionate share of gross profit as margins on vehicle sales proceed to come back under pressure.
EVs have fundamentally disrupted the normal dealership business model. With fewer moving parts, longer service intervals and reduced maintenance requirements, workshop traffic is about to say no which also weakens considered one of the first touchpoints through which dealers maintain customer relationships.
Without intervention, Mercer warns, this reduction in touch risks accelerating customer defection, particularly as independents and fast-fit chains compete ever more aggressively.
Drawing on US insights, he notes that convenience not loyalty has overtaken price because the leading reason customers return to dealerships with location, accessibility and ease of service rating as key differentiators.
Retailers must subsequently respond by rethinking service delivery, including expanding mobile servicing which within the US is delivering strong satisfaction, repeat visits and improved retention outcomes. “Mobile service is an important approach to improve convenience,” Mercer says.
He points out that mobile operations can extend reach, improve utilisation and create additional revenue streams and accomplish that without requiring investment in additional physical infrastructure.
Connected automotive technology can be emerging as a retention tool, enabling proactive engagement through maintenance alerts, software updates and data-led interventions, although Mercer noted that this potentially introduces recent challenges around data ownership and customer control.
Norway aftersales warning
Mercer points to Norway as a number one indicator of how dealership economics are evolving in a mature EV market, offering clear signposts for UK dealerships when it comes to what comes next.
In a market where EV adoption is already high, the Norwegian traditional aftersales model has been under sustained pressure for a while, forcing dealers to actively rebuild retention slightly than depend on a business-as-usual approach.
Faced with structurally lower servicing demand from electric vehicles, Norwegian retailers are usually not simply absorbing the impact, they’re redesigning their operating models to guard each customer relationships and revenue.
Probably the most significant shift is the emergence of different servicing structures geared toward keeping customers inside the dealer ecosystem for longer.
Some retailers are establishing secondary workshop operations or partnering with independent service networks to create lower-cost maintenance options for older and out-of-warranty vehicles.
Examples cited include multi-brand dealer groups comparable to Fylkesnes Bil which works with aftermarket repair chain Mekonomen to supply more competitively priced servicing and Solberg Bil, which operates each Meca and Mekonomen workshops alongside its franchised dealerships.
He also references Gumpen with its Volkswagen, Audi, Skoda, Nissan, and MG franchises which has introduced a separate service operation focused on older vehicles, offering a differentiated proposition that enables it to compete more effectively with independent garages.
These models reflect a more pragmatic approach to retention, recognising that customers won’t remain within the franchised network unless pricing and convenience are competitive.
For UK dealers, the implication is evident: hoping for purchasers to return to the workshop is pointless. Retention outcomes should be engineered.
Segmenting lifecycle retention
Mercer suggests this shift is being driven not only by EV adoption, but by broader parc dynamics as older vehicles fall outside warranty and migrate en masse towards lower-cost alternatives.
Here, Norwegian dealers are responding by actively segmenting their customer base, protecting high-margin, brand-led servicing for newer vehicles while creating alternative pathways to retain older cars that might otherwise be lost to independents.
This represents a deliberate departure from the normal dealership model, which has historically prioritised newer vehicles and allowed older ones to drift out of the network.
For UK dealerships, this raises a more fundamental strategic query: whether to defend margin on the expense of volume or to adapt the model to retain customers across the entire vehicle lifecycle.
“The challenge is real, but the perfect retailers will turn that challenge into a possibility,” says Mercer.
The Norwegian experience suggests that those that select the latter are higher positioned to guard long-term profitability, even when it requires rethinking pricing structures, brand boundaries and the role of the franchised workshop itself.
Crucially, EVs speed up this shift by removing the natural cadence of workshop visits that has historically underpinned retention. Without that regular contact, dealers must create recent reasons for purchasers to have interaction.
For UK dealers, Norway shouldn’t be an outlier, but a preview. The retailers that act on these signals early might be higher placed to retain each customers and revenue, while those who delay risk seeing each migrate to competitors.
Mobile servicing battleground
Beyond Norway, Mercer suggests convenience is becoming the first battleground for retention globally with independent operators often outperforming franchised dealers on this respect.
Retailers must rethink their service proposition around customer needs, considering how they will deliver accessibility comparable to other consumer sectors.
Mobile servicing is one key enabler, allowing dealers to cut back friction and extend brand presence beyond the physical site but Mercer also highlights the importance of making additional customer contact points, with services comparable to tyre alternative becoming increasingly necessary as service intervals shrink in an EV-driven market.
Retention across lifecycle
Retention must also extend beyond aftersales into vehicle sourcing and repurchase strategies.
Mercer here highlights the role of fast money offers as a approach to retain control of car supply, particularly when deployed through the service lane, where trust is higher and acquisition costs lower.
“A few of the most practical retention tools are also the only and money offers on used cars are considered one of the clearest examples,” he says.
Best-practice dealer groups are already sourcing a growing proportion of used stock through these channels, reinforcing the link between aftersales engagement and inventory strategy.
On the sales side, as brand loyalty becomes less reliable, on-site multi-branding is emerging as a more resilient long-term approach.
“You’ve gotten a world today with 75 brands out there, and possibly 90 in the following couple of years. That creates a highly competitive environment and leads people to ask more questions after they buy their next automotive,” Mercer said.
This shift requires organisational change, including empowering sales teams to operate across brands and locations, supported by aligned systems and incentives.
OEM role in arresting decline
Maintaining customer trust will even be critical. Mercer warns that inconsistent OEM pricing and incentives risk undermining relationships with the shopper and accelerating retention decline so retailers must counter this through transparent communication and consistent customer experiences.
While the strategic direction is evident, execution might be key. Dealers must translate retention strategies into practical actions that improve convenience, deliver value and create multiple engagement points across the lifecycle.
Mercer suggests that the teachings from Norway, combined with broader global trends, underline the urgency of this transition.
Dealerships that adapt early and put money into retention-focused models might be higher positioned to sustain profitability, while those who fail to reply risk losing relevance.
“The retailers who adapt early might be in a much stronger position than those that wait for the market to force the problem,” Mercer said.
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