Cautious optimism as dealers hope for stability in 2020
Exclusive findings from Close Brothers Motor Finance’s Dealer Satisfaction Survey reveal that most motor dealers (96%) are confident about business prospects in the market going into 2020, with almost six in 10 (58%) ‘very confident’.
At a time when the new government and the Brexit extension offer a potential end in sight for the political turbulence, the research found that ‘maintaining stability within the business’ has become the biggest opportunity in the coming months.
The research found that the proportion of dealers who see stability as the best opportunity for their business has doubled in the previous quarter, jumping to 14% from 7%. A similar proportion felt Brexit could offer opportunities for their business, more than doubling in the past three months from 6% to 13%.
One in eight (12%) dealers also see expanding their offering to new types of vehicles, as consumer demand continues to shift, as an opportunity for 2020.
However, while the potential for stability may be increasing, a significant proportion that remained concerned about the threat of Brexit remains. Almost half (47%) of dealers cited Brexit as a potential problem for their businesses, up from 43% in the previous quarter. This was nine times the proportion who were concerned about the threat of stock availability (5%), regulation (5%), or an economic downturn (5%).
Encouragingly, one in four dealers did not foresee any threats to their business going into the new year.
Top 5 opportunities and threats for car dealers in 2020
Commenting on the findings, Sean Kemple, Director of Sales at Close Brothers Motor Finance said: “It’s been a tough year for dealers, with new car sales taking a hit despite a surge in electric and hybrid cars. But, the high proportion of dealers who say they are confident about the year ahead might be the first glimpses of light at the end of the tunnel. The possibility of political and economic stability, even in the short term, is propping up confidence levels.
“However, we are not out of the woods yet. The potential consequences of Brexit continue to keep almost half of dealers up at night. Clearing away the question marks surrounding this, one way or another, will be welcomed by them. But, it’s not the only issue facing the sector that needs to be addressed by the next government, whoever that will be. Confusion around fuel type, not enough investment in the infrastructure for electric vehicles, legislation and regulation, as well as nervousness about an economic slowdown continue to affect consumer confidence and will still be there long after Brexit is out of the way.”