Car retail profit growth targets made ‘unachievable’ as a result of the new strain of COVID-19 in the UK, according to ASE Global.
In its latest profitability report, the automotive industry advisor revealed that the new strain of the virus dealt a severe blow to dealerships’ hopes of matching their 2019 profits in 2020.
According to ASE Global’s survey of nearly 200 UK dealerships and after the SMMT Q3 registrations were revealed, many in the automotive industry were optimistic of matching 2019 sales figures despite the pandemic, having successfully developed contactless and digital systems that could capitalise on pent up demand driving sales.
Although the adoption of contactless services put the industry in a better position to cope with the pandemic, the emergence of the new strain, and the harsher restrictions that followed, put an end to these hopes, with dealers nationwide now forced to return to click & collect only services.
Vince Powell, Managing Director of AX Innovation at AX, commented: “While it is true that the current restrictions will hinder sales, the industry is in a much better place than it was at the very beginning of the pandemic, drawing on technology and paperless systems to provide a safer, contact-free car buying journey.
During the first lockdown, AX saw a surge of interest in its AX Manage software, which enables dealers to easily manage unaccompanied test drives and provide a contact-free system for administration.
“Despite these efforts, many potential buyers still won’t feel comfortable purchasing a car online, but there is still demand for new and used cars which dealership staff can convert into sales.”
A recent study of 3,000 car buyers conducted by Car Dealer Magazine revealed that 43% are now comfortable buying a car online, up from 35% in October.