Q1WINNERS INVESTIGATION
WHY A SHUT-UP SHOP WASN’T BAD NEWS FOR EVERYONE The third lockdown brought a significant amount of hardship to the automotive sector but a few brands still managed to flourish.
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hen Boris Johnson announced the UK’s third and ultimately longest lockdown on January 4, collective sighs of misery were heard throughout car dealerships across the UK. The announcement was yet another hammer blow for an industry that had already taken its fair share of heat on the back of closed dealerships, disrupted supply chains, stunted manufacture and uncertain logistics. For most of them, the freedom to reopen to the public in April will have come as a huge relief, as getting customers across the threshold remains more than half the battle of sealing a deal in a physical sales environment. But there are some manufacturers that have marched their way through lockdown 3.0 with their heads held high, outperforming the first quarter of 2020 when they had a free run at the market. Who are they, and why have they outperformed the market? 12 | CarDealerMag.co.uk
Subaru
Volvo
Registrations in Q1 2020: 253 Registrations in Q1 2021: 310 Sales increase: 22.53%
Registrations in Q1 2020: 12,105 Registrations in Q1 2021: 13,964 Sales increase: 15.36%
A sales increase of just 57 units might not sound a huge amount year on year but the Subaru story needs to be put into perspective. The brand ended 2020 with just 951 registrations, its worst year since it debuted in the UK, so the uplift is a positive story, especially for a brand that relies more than most on its network of local and independent dealers to deliver results. The uptick in sales will be good news to the company’s new UK boss, John Hurtig, who made a commitment in late-2020 for Subaru to stay in the UK despite rumours to the contrary, and who is making a renewed focus on dealer performance the main driver behind the growth of the Subaru brand once again. ‘2020 was a horrible year,’ he said. ‘We’ve now changed a lot of things within Subaru UK. We also need to change the structure of our dealer network entirely.’
Volvo’s 15.36 per cent increase in sales in the first quarter of 2021 can be put down to the brand’s focus on removing dealers from the equation altogether in some areas. For example, anyone who wants to buy a new XC40 EV can only do so online, while the brand’s ‘Care by Volvo’ concierge-based service means that online services for its other cars and products are core to their appeal, too. In the brave new Volvo world, the dealer is there as a service to the owner and the business model for franchise success is based largely on aftersales services rather than physical car sales, with ordering Volvo models becoming an increasingly online phenomenon. Confusing it may be, but for the manufacturer the idea seems to be working. It’s certainly one to watch as we move into a world where dealerships are open again and the playing field levels out once more.
