“Profit margins” and “consumer confidence” have been named as both the two biggest threats and the two biggest opportunities facing dealers, according to a new survey for the RAC Dealer Network.
Almost half of respondents (48%) named reducing profit margins as the biggest threat to dealer business in the second half of 2018, followed by falling consumer confidence (26%) and Brexit (21%).
However, increasing consumer confidence was named by four out of 10 dealers (41%) when asked to name potential opportunities for dealers, followed by increasing profit margins by 39% and new profit streams by 22%.
Sean Kent, sales director at the RAC Dealer Network, which partners with The Warranty Group, now part of Assurant in the warranties and aftersales sector, said that the findings were indicative of widely different expectations across the industry.
He explained, “It perhaps appears contradictory that profit margins and consumer confidence are named as both the biggest threats to business and the biggest opportunities. However, what they really indicate, we believe, is the uncertainty that is affecting the general economy at the moment, as well as factors that are specific to the motor industry. There are widely different opinions about how the short-medium term will play out.
“Unknowns include Brexit especially, which continues to creep forward towards a conclusion that is difficult to predict, and the movement against diesel that has had such a strong effect on the new car market in a short space of time.”