NFDA’s Driving Digital 2024 took place at Westminster Central Hall in London on Thursday 2 May.
The event kicked off with NFDA Chief Executive, Sue Robinson welcoming everyone to this year’s Driving Digital event. Sue thanked all those in attendance and reiterated NFDA’s ongoing commitment and support to its members. With many ongoing developments in the industry such as the Financial Conduct Authority’s (FCA) investigation into motor finance complaints, Sue stressed that NFDA is working with the FCA closely on the matter and the importance of contacting NFDA for support.
Managing Director of JudgeService, Neil Addley then took to the stage going through the agenda and giving a rundown of the order of the speakers before introducing the first speaker of the day.
OWEN EDWARDS – HEAD OF DOWNSTREAM AUTOMOTIVE, GRANT THORNTON UK
The conference talks kicked off with Head of Downstream Automotive at Grant Thornton UK, Owen Edwards who covered various topics including the state of the UK economy currently as well as battery electric vehicles and Chinese new entrant brands.
UK Economy
- Owen noted that inflation in the UK is falling and is expected to fall further to 2.2% by the end of the year with the Bank of England taking a more ‘conservative’ approach in cutting interest rates.
- A gradual improvement in real GDP but slow growth in 2024 and 2025 – the UK will be one of the slower paced economies in Europe in this respect but important to note that there are varying levels of inflation and interest rates across the continent.
- Average real household disposable income is expected to improve over 2025 and beyond.
- Consumer confidence is picking up, but inflation and interest rates need to come down.
New and Used Vehicle Market
- New and used vehicle market is expected to grow in 2024 but growth will be caused by a ‘pushed’ new vehicle market.
- Automotive market has undergone significant change, and we can expect to see even more change over the next five years.
Battery Electric Vehicle Market
- Battery electric vehicle (BEVs) list prices could fall by 30% from current levels, generating increased demand for BEVs.
- Owen stated that we are coming to the end of the first phase of the cycle of BEVs in which we have seen the early adopters of BEVs, and we are now approaching the next phase in which BEV prices are too expensive for the ordinary person. Hence, prices could fall to generate that increased demand.
Chinese New Entrant Brands
- Chinese brands looking to gain market share through price and value for money.
- Many Chinese brands are vertically integrated through means such as producing their own batteries for their vehicles, e.g. BYD is 75% vertically integrated. In contrast, Tesla is 65% integrated.
- Chinese brands are finding ways to offset tariffs in USA and Europe, e.g. BYD plants in Mexico and Hungary.
CATHERINE FAIERS – CHIEF OPERATING OFFICER, AUTO TRADER
Next to take to the stage was Chief Operating Officer at Auto Trader, Catherine Faiers, who began her presentation by looking back at some motor retail predictions from 2018/19. The point being, that many of the predictions have not materialised as expected and are demonstrable proof that our industry can adapt. Catherine stressed that the role of the retailer in the car buying journey has never been more important than now.
Catherine listed a few points including:
- There are 58 brands selling cars in the UK – 25% more than in previous years.
- Buyers of BEVs are now looking at 14 different makes.
- Chinese new brand entrants such as BYD have done well but other brands still have a lot of work to get brand name recognition.
Retailers are crucial in helping consumers with understanding BEVs whilst also helping new brand entrants with getting brand name recognition.
Electric Vehicles
Electric vehicles will be mainstream in the next few years and buyers need retailers more than ever with brand choice.
Direct Selling
- Not every manufacturer is taking the same approach and there remain many details to work through in which manufacturers will require retailer assistance.
- Retailers are vital to car buyers as the journey becomes increasingly fragmented.
Omnichannel
The car buying journey is a blend of online and offline visits in which there are digital viewings and physical experiences at dealership sites.
MARK BUSBY – COMMERCIAL DIRECTOR, HENDY GROUP
Commercial Director of Hendy Group, Mark Busby then gave an overview of steps Hendy Group have taken recently including:
- Launching a six-month campaign titled ‘That’s Hendy’ which sought to position Hendy as the biggest and best in the areas where their sites are located. The campaign saw a reduction of vacancies by 75%.
- Profile Guided Optimisation which gives customer insights.
- Launched a Hendy App – a ‘soft’ launch in which there are around 3,500 users currently. Hendy hope to be able to serve vehicle updates through the app and include a tool in which colleagues can engage with customers directly.
DALE WYATT – DIRECTOR OF SUZUKI GB
After a short break for refreshments, Director of Suzuki GB, Dale Wyatt took to the stage. In a first for Driving Digital, Dale was able to provide a perspective from an OEM standpoint.
Dale gave insight as to why he believes dealers are the cornerstone of motor retailing and essential to OEM success whilst also giving his views on how dealers can make the most out of partnerships with manufacturers.
Dale stated that ‘a brand is a promise, and a dealer is the physical embodiment of the brand’.
In giving valuable insights into Suzuki, Dale noted that 10 years ago Suzuki developed a ‘cultural contract’ based on many aspects including trust, integrity, winning and succeeding. Currently, Suzuki has around a 2% market share and the strategy is to grow the brand, reach out to customers and turn those customers into advocates.
Dale advised dealerships on the following points in respect of having a positive relationship with their respective manufacturers:
- ‘Face north, stand on’.
- Invest time in the relationship.
- Communicate regularly, openly and honestly.
- Trust and motivation.
NEIL ADDLEY – MANAGING DIRECTOR OF JUDGESERVICE
Managing Director of JudgeService, Neil Addley returned to the stage presenting the latest research from the JudgeService Brand Tracker on what consumers are thinking about car brands, both new entrants and well-established brands and for the first time how dealers rank in consumer awareness.
The research consisted of a motoring panel of 1244 car buyers in April 2024 with a gender and age split. Results included:
- 49% of customers bought from a franchised dealer whilst 4% online.
- 88% of people intend to buy from a main dealer again if they had done so the last time whilst 43% would buy from an online retailer.
- 80% of people who have gone electric responded that they would stay with electric.
- 34% of respondents would look to hybrid as their next car whilst 39% would choose petrol.
- When the respondents were asked about new car brand entrants to the market (spontaneous awareness), 76% were not aware of any of the new brands whilst 13% noted BYD. In contrast, with prompted awareness, 54% were aware of Polestar, which was followed by Genesis and BYD.
GRAEME POTTS – CHIEF EXECUTIVE OF EDEN MOTOR GROUP
The final speaker of the day was Chief Executive of Eden Motor Group, Graeme Potts who discussed many of the ongoing challenges that dealers are currently facing.
Graeme mentioned that politics, environmental concerns and customers are a balancing act that dealers have to grapple with. Graeme stressed that dealers need to listen more to what customers are telling them particularly regarding environmental concerns factors, e.g. home charging is difficult either legally or for convenience.
Graeme stated that hybrid vehicles are the most sensible alternative and the closest to reconciling everyone’s agenda. Graeme also noted that retailers will have the challenge and opportunity of serving a mixed vehicle parc for many years to come.
Graeme concluded that retailers need a market driven business model, certainty of tenure, great people who will lead with passion and process and resilience/flexibility.
The event ended with a Q & A session with all speakers before Neil Addley shared his final thoughts.
