Is Covid really to blame for a drop in fleet car sales?

Tuesday, April 27, 2021 - 09:19
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If you are a fleet or transport manager tasked with purchasing new stock at some point over the last 12 months, the chances are that the Covid pandemic made it a difficult task.

fleet car salesWith most showrooms closed, the luxury of being able to physically inspect vehicles was largely absent over the last year, a very disconcerting prospect for those managers responsible for buying large fleets and for spending large sums of company cash.

Indeed, the impact of Covid on fleet car sales over the last year speaks for itself. The Society of Motor Manufacturers and Traders (SMMT) has reported a year-on-year drop of over 15,000 vehicles when you compare the sales figures of February 2020 (45,545) and February 2021 (29,948).

The global pandemic has changed the way we all live, work and shop, including fleet and transport managers. And while Covid’s impact on the steep decline in fleet car sales is not in doubt, it raises the question of whether motor traders that specialise in providing large fleets to companies should re-examine their sales tactics and think again about the tools they use to attract fleet managers and sell their vehicles to them.

Direct parallels can be drawn here with other parts of the retail sector, which has seen a raft of famous stores disappear from our high streets. Shoppers turned to online platforms, while many traditional retailers responded by facilitating online shopping, click-and-collect services and home deliveries. Overall, online sales accounted for a third of all retail spending last year – a record.

Those in the overall motor sector that had foreseen this e-commerce shift – which was emerging before the pandemic – are likely to have fared better than those that continued to rely on customers visiting their dealerships. It was noticeable that Aim-listed Vertu Motors recently revealed that it had met its £23m profit target despite three national lockdowns – and in part this was due to strong digital sales.

You’d also be hard pushed not to have noticed television adverts from motor retailers, heralding their completely end-to-end digital car-buying process as a car-buying “revolution”. Indeed, one of the most prolific advertisers, Cazoo, is reported to be planning a £5bn stock market float, having launched little more than a year ago.

It makes you wonder whether fleet car sales figures would have fared better during a year of lockdowns and tier restrictions had more fleet providers offered a fully digitised service. Dealers recognise that customer expectations of an online service have accelerated in the wake of the pandemic, yet according to a survey by Moto Novo many (albeit not fleet specialists) admit that they have not developed their digital strategies to address this change.

The shift to online buying will take time and it will not be wholesale. There will always be a significant number of buyers who will want to visit a showroom, especially fleet managers who might still feel it is their “duty” to kick the tyres and touch the paintwork in person – but implementing a digital capability should be seen as a vital complementary service at the very least to enable fleet managers to carry out the end-to-end task online should they so wish.

Let us not forget, too, that selecting the new stock is just one, tiny part of the modern fleet manager’s never-ending to-do list. With vehicle maintenance, managing drivers, negotiating with suppliers, ensuring all compliance aspects are adhered to and overseeing the integration of the new stock into existing stock, I am sure many would welcome the opportunity to have an easy, straightforward, one-stop buying and finance option online.

With digital solutions offering a competitive advantage right across the sector, now is the time to act. Our own experience of working with motor retailers to elevate their digital route-to-market has highlighted them mammoth strides forward that can be achieved. Deploying digital services is not the time-consuming, expensive undertaking it once was. Bespoke solutions for the motor sector can be created in as little as four months, resulting in a level of service that will open them up to a whole new audience.

And Chancellor Rishi Sunak has also emphasised the importance of UK businesses embracing digital with the ‘Help to Grow’ scheme announced in the Budget that will offer discounts on software to smaller businesses.

While Covid has undoubtedly had a major impact, it has only accelerated a major digital shift that was already well underway beforehand. Traditional retailers are increasing adopting to the digital phenomenon, as have banks and fast-food outlets, who no longer rely on customers physically popping by.

Now it’s the turn of the motor sector. The ability to carry out all stages of procuring a vehicle online, from researching and carrying out checks, ordering customisable extras, to arranging finance, signing documents, and taking delivery, is now no longer a ‘nice-to-have’. It is an essential ‘must-have’ that should not be ignored, even as dealerships reopen and we begin the move into post-pandemic life.


Author: Jerry Young, CEO of ieDigital

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