23 Sep 16

Digitisation is squeezing Europe’s car dealers

The digital economy is transforming every nook and cranny of the economy, including car dealerships. But where some sectors are able to seize the opportunity, dealers are experiencing more of a squeeze, and are suffering. 

That is the conclusion of a McKinsey report commissioned by CECRA, the European Council for Motor Trades and Repairs, and presented at the European Car Dealer Day in Brussels this week. 

The online world offers opportunities to digitise sales and processes, but also entails threats to car dealers’ core business, by offering OEMs the opportunity to engage in direct sales, and by allowing other players a relatively easy and cheap way to enter the market. 

Other, related issues include vehicle connectivity and data ownership, shifting consumer preferences in shopping and mobility, fleet professionalisation and ultimately the change from a product-based to a customer-centric model. All of which are analysed in the McKinsey report, with scenarios for their potential impact provided.
“Potential disruptions put dealers’ business model under pressure. Dealers need to act and define their own strategy”, say Thomas Furcher and Marcus Hohmann (McKinsey).

Image: Diego Delso, CC BY-SA 3.0

Authored by: Frank Jacobs