In accordance with a brand new study, two-thirds of automobile dealers (66%) are apprehensive about future margin erosion that can affect their business.
Startline’s used automobile tracker in July shows that the predominant concerns are high used automobile values that squeeze margins (mentioned by 66%), the associated fee of electrification akin to installing chargers (52%) and increased staffing costs (52%).
Other top concerns include increasing difficulties with compliance (36%) and the associated fee of infrastructure, including showrooms (36%).
Paul Burgess, Managing Director of Startline Motor Finance, said: “We’ve got seen growing concern about margin erosion throughout the used automobile dealership community in recent months and this month’s Tracker shows that it is a real concern for a lot of.
“There’s just quite a bit occurring within the industry at once. There are a lot of areas where costs are rising, akin to staffing and infrastructure; where investments are needed, akin to electrification; and where resources are consumed, akin to compliance.
“Add to this the continued headwinds generated by stock-outs and the resulting high vehicle prices and values, and it is evident that profits are under threat from all sides, while recent opportunities may currently be tougher to discover.”
Interestingly, the research also indicates that only 27% of dealers were concerned about losing warranty sales and other after-sales products, while only 15% believed that recent consumer duty regulations would affect their ability to sell auto finance.
Burgess said, “We’re definitely seeing efforts across our dealer base to extend the presence of auto finance, with many trying to Consumer Duty as a option to positively rethink their entire approach to this area through a greater match between the automobile buyer and the finance product.”
The Startline Used Automotive Tracker is compiled monthly for Startline Motor Finance by APD Global Research, well-known within the automotive industry for its business intelligence reports and customer experience programs. This time, 319 consumers and 50 merchants were interviewed.
This Article was First Appeared At www.am-online.com