Dealers will continue to be impacted by new car supply challenges into Q3 2022

According to SMMT, the availability of new car stock is expected to be suppressed well into 2022 as the global semiconductor shortage continues to hamper the supply of new vehicles. This will pose major challenges for car dealer networks with potential impacts including: 

• Reduced volumes, the lack of supply will inherently reduce dealers ability to service demand for new vehicles and as such is expected to reduce revenues from new car sales.
• Dealers ability to achieve FY22 volume targets will be impacted by the reduced volumes and these targets may need to be reviewed with OEMs in order to ensure that they encourage the right behaviours. 
• Reduced new vehicle volumes will impact upon staff utilisation, dealers should review their staffing structures to ensure efficient operations and minimise any downtime. 
• With reduced new vehicle volumes, dealers will need to focus on retaining service customers post initial warranty periods, otherwise they run the risk of a subsequent decline in their aftersales business.
• Used vehicles will be critical and access to used stock will be a major focus for many, unlocking new channels for used stock will ensure that used volumes can be maximised. Albeit, dealers need to maintain a careful view over cost of used stock to ensure they are not left exposed should used pricing return to a more normal basis. 

The prevailing market conditions will be challenging, but through careful planning and taking early actions, dealers will be able to mitigate the negative impact of these challenges whilst also maximising the positive impact of any potential opportunities.