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The last few days of ICDP have been busy as we prepare for our spring members meeting in Berlin this week.
At this point in the year we completed a number of research streams before launching with new program activities starting in April.
Spring gathering is therefore a ‘best of the best’ recap and a chance to look back at what has emerged over the past 12 months, some of which we anticipated, some of which is new or at least of a different magnitude.
We describe the ICDP as similar to the navigator in a WRC rally car. We don’t drive the car but we try to support drivers with warnings of the worst dangers ahead and where there are opportunities to make faster progress.
For manufacturers, supply chain issues that hindered production continued throughout the year, increasing profits for them and most dealers.
The wave of BEV new product launches has been anticipated but consumer demand is still far from solid, especially from retail customers who are the main target for used cars.
This causes some forced registrations and residual value interference. With continuing uncertainty around energy prices and tax treatment, this is a danger that is likely to continue for some time.
We didn’t anticipate a year ago the number of manufacturers who would choose to announce in the following months a transition to agents in at least some of the previewed markets.
The list of manufacturers who have stated that they will not move to agencies is not much smaller than those who have done so or are planning to.
However there are also a number of challenges associated with that transition and while the recent delays due to issues to be resolved are clearly the right responses, some are urgent, potentially creating problems for the manufacturers themselves but also dealers and customers.
Dealers have generally accepted the changes, apparently accepting being forced through routes they strongly doubted and in some cases legal trouble.
That may reflect the unequal power balance in the industry, but it is also a missed opportunity because there has not been genuine engagement between manufacturers and dealers to understand how these fundamental changes to the retail model can be implemented with reduced disruption and risk.
Dealers are focusing more on improving their used car business, after-sales reach and their digital capabilities. This will all protect them to some extent from disruptions in the new car business, but ultimately everyone in the industry depends on new car sales to feed downstream activity and profits.
The independent sector consisting of parts suppliers, distributors and repair shops has again demonstrated their ability to adapt to changes in technology, be it from electrification or the complexity of the car itself from ADAS and other features.
Scale becomes more important and is achieved through acquisitions and through growing membership of franchise systems that give virtual scale to smaller players.
As manufacturers and dealers try to maintain a higher proportion of parks in their world further into the car’s life, independent players seek to form relationships with large fleet operators and insurers to push back, often competing on both service and price.
We still see opportunities for co-opetition, namely a combination of competition and cooperation between the franchised and independent workshop worlds and there have been several examples over the past year.
Finally for the many businesses that act as intermediaries, outsourcers and technology providers across industries, they too have adapted over the last year to the various pressures that have emerged.
They must remain agile to avoid getting stuck in old solutions that have limited futures, and reinvent themselves around new opportunities and needs.
In some cases we see this happening through mergers and acquisitions between existing players that expand product and/or geographic reach and in other cases through product partnerships where partners can collectively meet the needs of the entire ecosystem.
Regardless of where you stand in the industry, the need to understand where the twists and turns are will be more important than ever. Avoiding it will be the ticket to survival but understanding where opportunities to turn off the power will be the source of the difference.
For anyone based in the UK, we have an open meeting covering these topics from our research that anyone in the industry can attend on April 20 at the Brooklands Motor Museum on the west side of London. If you are interested to attend the details Here and you can order by emailing the Project Office [email protected]
Steve Young is managing director of ICDP
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