Friday, January 19, 2018

Death of the dealership? Experts warn half of forecourts could disappear by 2025

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Hugo Griffiths 2018-01-19 11:10

Industry-wide survey warns up to 50 per cent of all “physical retail outlets” could be gone in just seven years

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Car dealerships as we know them are likely to dramatically alter over the next seven years, with up to 50 per cent of forecourts expected to shut up shop by 2025.

Accountancy firm KPMG’s survey of 907 leaders from the automotive industry found the vast majority (85 per cent) felt that between 20 and 50 per cent of dealerships would close within seven years. Over half (54 per cent) felt at least 30 per cent of forecourts would close by 2025, while 94 per cent of respondents said they thought at least 10 per cent of physical dealers will no longer exist by that date.

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The report’s authors call the results a “warning sign” for retailers, saying they present "a need to rethink retail concepts and business models, particularly with customers purchasing more of their goods and services at the touch of a button."

Many retailers are already preparing for a shift towards online sales. Earlier this year, Citroen announced it aims to sell 10 per cent of its cars online by 2021. Hyundai, Peugeot and a number of other manufacturers have also launched online sales platforms, as carmakers seek to cater to consumer tastes for buying goods from the comfort of their own homes.

Other predictions revealed by KPMG’s annual survey of leading automotive executives include the fact that 77 per cent of those polled felt internal combustion engines will be more important than electric drivetrains “for a very long time”.

The survey also predicted that fuel cell vehicles would become the number one key trend until 2025 - overtaking electric vehicles based on last year's poll - while the number of executives believing diesel remains a “technologically viable option” climbed to 50 per cent, up three points from 2017.

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