ICDP Managing Director's blog

As any good dealer knows, used cars can be your friend in need. If a dealer business is considered as having three pillars, used cars is the one that tends to stand strongest through whatever disruption is going on in the broader market.

I read an article a couple weeks ago in Automotive News Europe related to pricing power.. It was a good piece, citing various researchers, and with data showing how some brands, notably PSA under Carlos Tavares, have done better than others in improving real pricing in recent years.

This wasn’t the plan for today’s blog but sometimes you just have to go with the flow, and I didn’t have much option today but to refer to an incident that I was involved in yesterday.

As I was completing last week’s blog, the news came out that Mitsubishi Motors had announced their withdrawal from Europe.

Distribution cost is generally viewed as being around one third of the list price of a car, and it is a proportion that has been fairly stable over many years, even decades.

I did consider picking this topic for my blog last week – the acquisition of Imperial Car Supermarkets in the UK by online used car start-up Cazoo last week. The rumours were circulating last weekend, but not confirmed until Monday.

The last week has seen a number of conversations with ICDP members and other contacts about the prospects for agency to replace the traditional franchise system in dealer contracts. 

My blog is a day late this week as I had to spend some time ‘spannering’ my classic rally car to get it ready for its MOT test today. 

My blog two weeks ago on the need to rethink new vehicle supply strategies seems to have struck a chord – frankly to my surprise, as I thought even the supply chain diehards had either accepted defeat or retired. 

As those dealerships that were closed reopen across Europe, we are starting to get a feel for the level of customer demand that will – or will not – help pull the industry, and our broader economies, out of the slump caused by the pandemic. 

A core element of ICDP’s work over more than two decades has been seeking to improve how new vehicle supply systems are planned and operated. 

Whilst the most important question on business agendas at the moment is undoubtedly how business will develop in the coming months, it seems fairly certain that the recovery will not be immediate. 

We now seem to be on a path out of the full lockdown in most European markets, with dealerships either open or due to reopen in weeks, and most manufacturing plants running, or due to restart in the next month.