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What Car? Insight, March 2018Back

This month’s highlights include:

– An interview with Nigel McMinn, Lookers CEO (extract from the interview below)
– An analysis of rapidly increasing research into electric car by car buyers
– A look at the most popular brands and models on What Car? this month
– Analysis of the most popular reviews on What Car?
– Insight into how the success of television advertising can be measured on
– An overview of the most popular brands and models in What Car? lease searches
– Insight from our Target Price mystery shopping team
– The best and worst True MPG results ever recorded
– Cross-shopping analysis on What Car? for the Nissan Qashqai and Seat Ibiza

Change in the car industry is exciting, not concerning

Nigel McMinn, COO Lookers

DIGITAL SALES, ALL-IN-ONE lease plans, service centres rather than sales centres… the list of challenges to retailing goes on. But, when looking to the future, Lookers COO Nigel McMinn sees an industry facing evolution, not disruption, and consequently no reason to panic.

“All industries change,” he says. “Consumer tastes change, consumer habits change and consumer behaviour changes. It’s up to the respective industries to adapt to those ever-changing needs.

“Let’s look ahead 10-20 years and say the roads are full of electric vehicles, a lot of them autonomous, not owned but part of mobility schemes and all purchased or hired online. I wouldn’t call that disruption, just things to adapt to.”

When pushed, McMinn concedes that the drop-in diesel registrations has been dramatic, but he counters with the argument that retailers have less reason to be concerned than some, because a new car buyer is still a new car buyer.

“My suspicion on diesel is that the whole market is over-reacting – a typical initial reaction – and that it will level itself back up in time, but let’s see,” he says. “What seems incredulous to me is that the Government has forgotten that it created a strong diesel market by imposing CO2 targets. Now it’s focused on NOx and wants to pivot. The tech needs time to catch up, yet we’re reacting with populist political soundbites rather than practical measures. Meanwhile, the CO2 agenda seems to have been forgotten.”

McMinn predicts that diesel will settle at around a 25% share of the market by 2025. He also points out that car sales typically follow trends in gross domestic product (GDP) and population growth, suggesting that new car sales will, when analysed over 15 years rather than 15 months, keep growing.

McMinn also draws a parallel between the growth in leasing and the potential growth of online sales, recalling Ford’s early forays into monthly payments more than 20 years ago.

“I remember working with finance companies and having to push back,” he says, “telling them there was no demand for lease deals from customers and there was no way I was going to promote them until a natural demand was there. Now, it’s the default way; customers actively want it.

“I see internet sales evolving the same way. I don’t doubt that they will become an increasing part of our business, and one day they may be a significant part of it. But I don’t see it being in any way disruptive, rather just another evolution of how we do business that, I suspect, will evolve slowly, based on what we’ve seen so far. And it will involve an overwhelmingly high number of those customers still visiting a dealership.

“Look at internet grocery shopping. We all know that going to a supermarket is a hassle and time-consuming – it requires loading a trolley, unloading it into your car, carrying the goods into your home and more – yet only around 7% of UK customers buy their groceries online.

“Some things are just better as experiences, and buying a car is one of them. It’s driven by human interaction and emotion; there’s no scenario in which I can’t see a role for the dealer in the middle of the process.”

None of this is to say McMinn can’t see areas in which his business can adapt and improve. Like many in his position, he’s obsessive about customer service and frustrated that the public’s perception of dealers still doesn’t match the reality. […]

“We’re regulated, scrutinised and in front of the public. There is nowhere to hide, and when we make mistakes, we fix them.

“Car retailing is a changing business and a fantastically exciting one to be involved in.”

You can access the full insight here:

Posted by Sue Robinson on 23/03/2018