Biggest Challenges For Used Car Dealerships In 2021
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Originally Posted On: https://www.jjpremiumcars.co.uk/blog/biggest-challenges-for-used-car-dealerships-in-2021
The good, the bad and the ugly. From lockdown restrictions to the fuel crisis and everything in between, we’re taking a look at the biggest changes and challenges that used car dealerships have faced across the UK over the past year.
The biggest changes and challenges across the used car sector
In the last year, the UK has faced some of the biggest challenges and disruptions to the car industry for decades. But it hasn’t all been bad. JJ Premium Cars are revealing their thoughts on the top changes and how they’ve adapted to suit the rapidly changing landscape as a used car dealership.
The COVID-19 pandemic has reshaped how consumers purchase products in the UK, including how people research and buy cars. According to a survey conducted by Car Gurus, 87% expected to purchase later than planned in 2020. However, only 4% of those surveyed said they were going to postpone their decision to purchase a car indefinitely.
How did COVID impact used car sales in the UK?
UK car sales statistics published on 11 May 2021 showed that UK used car sales fell 8.9% in Q1 2021. Monthly performances were clearly impacted by lockdowns, but March 2021 was up on a particularly weak 2020.
‘These figures lay bare the turbulent impact of coronavirus lockdowns on the used car market… With car showrooms open again and the UK coming out of COVID restrictions, the sector can look forward with renewed optimism.’
Mike Hawes, SMMT Chief Executive
Chip shortage and overall decrease in car manufacturing
SMMT reported a 27% decrease in British car manufacturing when comparing August 2020 – 21. One of the key culprits behind the drop in British car manufacturing included the global shortages of semiconductors. The Guardian reported that only 215,312 new cars in total were registered in September 2021, the lowest number since 1998, according to the SMMT. Could this decrease in car manufacturing push more people to buy second-hand?
The easing of lockdown restrictions mixed with a shortage of new car models resulted in a welcome boost for used car sales.
“Manufacturer production issues have undoubtedly created more opportunities in the used car market. We’ve seen a spike in demand and are busier than ever before. We’d like to think that if customers receive a good level of service from their supplying dealer, that in the future they may return to the used car market.”
Johan Leuridan, Director of JJ Premium Cars
What started as reports of a few petrol stations across the UK running out of fuel sparked a nationwide panic-buying spree, resulting in a fuel shortage. This was subsequently blamed on the lack of HGV drivers available to transport fuel to the pumps. This certainly impacted drivers across the UK, with frustratingly long queues at petrol stations and a rise in the number of people running out of fuel mid-journey. But how did this impact used car dealerships, if at all?
“We haven’t suffered at the hands of the fuel shortage so far… having the knowledge of which fuel stations in the local area are receiving fuel and at what times proved vital in reassuring customers they could travel to us with confidence. One Saturday we had 16 appointments, all customers expressing their concerns about fuel but 15 out of the 16 customers drove away happy with their new purchase… and with the ability to get fuel!”
How have used car dealerships dealt with the challenges?
With dealerships forced to shut their showrooms during the pandemic and the demand for online shopping skyrocketing, many used car businesses adapted by improving their online presence.
“When COVID-19 struck we entered into the unknown, the landscape changed, and we experienced a global pandemic for the first time. After the initial shock-of-capture and the sudden realisation that we no longer have a showroom to operate out of, we had to improvise. Fortunately we’re set up for online sales so the ‘click and collect/deliver’ wasn’t difficult to adjust to after figuring out the logistical element.”
In fact, 78% of those planning to buy a car in 2020 cited a preference for contactless selling options, with the majority choosing private dealership appointments. JJ Premium Cars offers this service, along with convenient click and collect options.
There’s no doubt that used car dealerships up and down the country have faced a turbulent time over the past 18 months, but with the rapidly changing landscape, JJ Premium Cars has adapted its sales strategies and looks forward to continuing to offer a premium level of service and high quality used cars.
Shop used cars in Peterborough online at JJ Premium Cars today, or contact us for more information.