UK new car industry better prepared for second lockdown
This is the latest report in a series of weekly updates for industry colleagues from Rachael Prasher, managing director of What Car? and Haymarket Automotive. Quoted poll data is from more than 6100 whatcar.com users.
On Saturday, the Government announced another national lockdown that will mean dealerships across England will once more have to close their doors to the public from Thursday, 5 November – retailers in Wales have been shut since 23rd October.
It is another blow to the industry, which has been on the road to recovery since the first lockdown was in effect between March and June.
If there is a positive to take from the latest news, it is that the industry is better prepared this time around. Businesses have invested significantly in online retail systems and processes over the past six months. We’ve seen acceleration in the evolution of the digital sales environment; among developments, Groupe PSA has launched a virtual showroom hub across all of its brands, while existing services such as the Skoda Live Tour have helped potential buyers view and inspect cars from the comfort of their own homes via live video chat.
Our previous research of in-market buyers in July found 13.7% saying that the pandemic had made them more likely to speak to a dealer via a video chat than visiting them in person, showing that consumers are slowly adapting to online buying. Nearly a quarter of the same in-market buyers told us they were confident to buy a vehicle without test driving it first.
It’s also clear that there is still underlying demand in the market. Just before the lockdown was announced, we conducted a study with 6166 in-market buyers and found that 19.4% were looking to buy in the next four weeks, while 19.5% were looking to purchase within a three-month period. How this will translate into actual purchases, with retailers now forced to close, is hard to estimate, but we will keep monitoring the buying intentions of – and timeframes for – buyers as the weeks progress.
The Government has also not ruled out ‘click-and-order’ deliveries, which will help retailers to complete deliveries of new vehicles. Our latest research found 26.0% of in-market buyers are willing to wait up to four weeks for a new vehicle, with 22.2% happy to wait for up to eight weeks. So there are reasons for optimism among retailers and OEMs who have embraced the online sales environment.
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