25 March 2013

Sitting in a conference room in Brussels for two days discussing the future of the European auto retail industry may not be everybody’s idea of fun.

But sometimes it’s useful to get away from the daily grind of the office and listen to the views of others. That’s why the ENG Automotive Retail and Distribution Summit proved enlightening.

Of course, continental Europe faces different issues from the UK. The depth of the ‘crisis’ (as it was referred to on more than one occasion) is far greater and, even on the continent, not all markets are equal. Cross-border trade, especially of pre-registered cars, is a real issue.

Many themes emerged but two stuck out for immediate comment. The first (and I’ve heard this before) is the growing realisation that the next generation of customers may well not be interested in cars. In short, they are more interested in the new iPad than the new Audi.

For most of the car enthusiasts working in auto retailing (a senior executive once told me he had too many car enthusiasts working for him) this may be a difficult concept to grasp; but it will lead to fundamental shift in buyer behaviour that it will be impossible to ignore.

The second was the clear view that European executives have of the different functions in manufacturing, wholesaling and retailing. The message was: ‘wholesalers (National Sales Companies) should stay out of retailing and not try to tell us how to run our business’.

Indeed, the director of one successful multi-franchise distributor/retailer explained it was now company strategy to “reduce our reliance on OEMs”.

“We cannot be on bended-knee to our importers and that needs to be in the business plan,” he said. “We need to run the business.”

Upcoming changes in Block Exemption will make that stance more difficult and, of course, you have to be speaking from a position of strength to make the statement in the first place. But if manufacturer brands are losing their appeal, and cars are to be bought as commodities, it’s not a bad way to start thinking about the future.

Rupert Saunders

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