According to data from the Society of Motor Manufacturers and Traders (SMMT) just 1.63 million vehicles were registered in 2020, the fewest since 1992.
Another possible blow to dealerships is the likely renewal of BER (correctly known as the Block Exemption Regulations 461/2010). Under BER, buyers can have their new car serviced outside of the dealer network. Under this agreement the manufacturer is obliged to provide access to repair and maintenance data, both from the car itself via the diagnostics port and to the dealership’s computer tool, using tech known as pass-through and cannot restrict warranties to vehicles only serviced within a franchise network.
The likely renewal of BER may mean a further loss of revenue to dealerships, with much the revenue from the purchase of a new car previously being delivered within the servicing agreement.
More worrying still, are figures from AutoVHC which show that the average dealership is not replacing 66 per cent of severely worn tyres.
Not only does this create safety issues for those customers but also failing to sell an average of 50 urgently required tyres per month represents a significant loss of revenue for a service department and plays directly into the hands of competitive rapid-fit operators.
The AutoVHC study highlighted that in services carried out in June last year, dealers only sold replacement tyres on 34 per cent of the occasions where tyres were identified as being severely worn or faulty. Data came from a survey of more than 400 UK franchised dealers. More than 28,000 tyres were identified as ‘Red’ during vehicle health checking, meaning there were serious defects, such as an illegal tread depth. However, just 9,000 replacement tyres were sold by these dealerships, leaving around 19,000 dangerous tyres in July alone that were allowed back on the road.
Using a common order basket of two medium-quality tyres which cost an average £147.00, and the average missed sales number identified of 70 per outlet, those dealerships lost out on £10,200 for the month of June, which equates to an average for the year of £123,000. So, what are the reasons for this? Partly it could be due to identifying the correct replacement tyre for the vehicle. If a service department team find is difficult to identify the correct specification of vehicle, tyre or component, there is a possibility the sales is avoided.
So how can dealerships increase revenue when faced with these challenging times?
The answer is simple and one that has been documented for some time. Dealerships need to optimise revenue from all sources and most importantly, increase high-margin, low-risk aftersales opportunities such as tyre sales.
Some of the fastest growing dealership networks have been able to maintain and increase revenue through 2020 with the supply of tyre sales. Most importantly these businesses have also recognised that by offering these aftersales services they are able to close their customer retention cycle, maintaining footfall into their dealerships by making sure that the vehicle sale does not conclude their business. It’s also worth mentioning that in the UK, tyre sales are currently classed as essential, so even if your dealership must close, revenue can still be generated from aftersales sources.
Current restriction have led to an acceleration in digital retailing, with the coronavirus is credited with speeding up dealerships' adoption of digital retailing tools and processes. Auto retailers had previously been slower to implement e-commerce than some other industries, but that shift accelerated as dealers worked to sell cars remotely when they couldn't in person. That led to more online buying and e-signing options. Best performing dealerships have service departments that have rolled out more contactless options, from mobile check-in capabilities to mobile service vans. Auto repair was generally considered an essential service during the spring shutdowns and dealerships expanded their use of pickup and delivery of customers' vehicles, bringing greater convenience at a time when customers were concerned about health and safety.
How can we help?
We provide qualified Vehicle, Tyre and Wheel Fitment and Product Data, enabling you to visualise and optimise your products online and within ERP-systems. Our Information is matched to MVRIS in the UK, ACES/AAIA in the US and KTYPE for other countries and seamlessly integrates with DMS, e-commerce platforms and internal inventory systems.
Easily access manufacturer vehicle descriptions and specifications, OE tyre and wheel fitments and OE upstep specifications. You can link tyre and wheel images and product data with EAN product numbers, and EU compliant labelling, TPMS specifications and TUV documents where applicable. Available globally with 100% fitment accuracy against vehicles in operation.
With data that covers passenger cars, motorcycles and commercial vehicles; all from the same API’s, you can also offer search by License Plate, or Year, Make and Model. It’s simple and easy to integrate with consumer-facing websites, point of sale systems, e-commerce platforms and internal back-office systems. We can offer both REST JSON and SOAP XML so you can decide which approach is best for your needs.
DriveRightData’s products and services increase dealership influence and maximise the touch points with a consumer post vehicle sale, thus increasing customer retention. It also creates the support for increased sales and revenue opportunities through enabling the dealer to facilitate a cradle to grave proposition and offer a connected and touch-less environment for the consumer.
Often for dealerships, post-sale opportunities for the sale of tyres and potentially wheels are lost to traditional tyre retailers. Use of the DriveRightData API’s supplement aftersales revenue opportunities for networks, improving the consumer user experience through the provision of data supporting the sale of tyres and potentially wheels.
The use of data to target the sale of tyre and wheel products, can help the market offset any lost revenues from a potential slowdown in new and used car sales in the months ahead, as the market and wider economy adapt to the impact of lockdown.
In addition, it can also help to close the loop on a full, ‘in-life’ vehicle offering to the consumer. With the information gained from the API’s used as a hook proposition. By enabling the dealer / OEM to facilitate a discussion around the purchase of a new or used vehicle, i.e., persuading the consumer to use the money they intend to spend on tyres, as the basis of a deposit on a vehicle.
Contact us now to discuss exact requirements or to activate your free trial.