ICDP Managing Director's blog

There was an interesting article in the Financial Times this week describing the challenges that established car manufacturers are experiencing as they try to adapt to being suppliers of software as much as hardware. 

In many parts of the industry, one of the most important questions at the moment is who (or what) are going to be the winners.  The focus for many is on manufacturers as new entrants heap pressure on the established players, but manufacturers themselves are also having to make choices as they seek to manage their investment and maximise their chances of being amongst the winners. 

Nobody won my challenge in last week’s blog asking how I might be able to create a link between Archbishop Desmond Tutu and the world of automotive distribution.

Having said a few weeks ago that I was shocked that a month had passed since my last blog, I find myself another three weeks on in a similar situation.  That does not mean that nothing has caught my attention recently, just that what has demanded my attention has unfortunately pushed the blogs down my ‘to do’ list. 

I’m slightly shocked to discover that it is a month since my last ‘weekly’ blog…  Although I know that many of you enjoy the blogs, I hope that nobody was holding their breath waiting for it to land!  It has been a hectic month – our ICDP Summer Members’ Meeting, panel slots at the Automotive News Europe Congress and the BVRLA Fleets in Charge Conference.

As most readers of this blog will know, I now wear two hats – one as the MD of ICDP, the other as the MD of Auto West London, a dealer group in the making, established by Cetas Otomotiv, a long-standing member of the ICDP research programme.

Other issues like tariffs and the march of the Chinese have been grabbing the headlines recently, but arguably the dominant issue that we should be most focused on is how the car and road transport in general should contribute to the greening of the planet. 

I’ve had a few conversations in the last couple weeks about network density.  These all related to franchised dealers, but the same questions and debates are applicable to the density of independent parts distributors and other networks.

We’re all familiar I think with the fierce loyalty that some brands can attract, one of the most notable being Harley-Davidson Motor Cycles where some owners have gone so far as to tattoo the badge onto their body, demonstrating their lifelong commitment to the brand.

We are just finalising our rankings of the Top 300 dealer groups in Europe for the 2023 financial year.

At the ICDP Spring Meeting in Amsterdam last month, I presented our thoughts on dealer digitalisation.  The key point that I wanted to make was that as the customer buying journey has evolved, and what can be done through technology has improved, the focus of digitalisation should not be on applying IT to established processes and business models, but rethinking the business model as a whole.

Halfords is a household name in the UK, a retailer of car parts and accessories, as well as bicycles, e-scooters and related gear.  They also have a network of independent repairers which following a series of acquisitions is the largest single workshop network in the UK, and have grown a fleet of mobile service vans.

I wrote a few months ago about the lessons that can be learned from Formula 1 in terms of the use of data, and having watched an extremely boring Japanese Grand Prix yesterday, I return to the same topic today. 

There has been a lot written and said about the impact of the new Chinese brands on the established players in Europe, and I have talked about it in my blogs in past.  The primary focus has been on the competitive pricing, the technical leadership in BEVs and the level of technology included as standard in the cars with features like adaptive cruise control and lane keeping in even the cheapest cars. 

It seems appropriate given that last week’s blog challenged the potential mass roll-out of robotaxis to tackle this week another of the visionary concepts that I would argue attracts more attention than it deserves – that of the flying car. 

There have been some blogs and news items recently, including from our good friend Glenn Mercer, which relate to some recent positive developments in the world of Waymo.  They just achieved 200,000 rides in one week, double the level just six months ago and up from 10,000 two years ago.

We are giving a lot of thought currently to dealer digitalisation – thinking primarily about integration of data processes and related IT, and exploiting that data and the broader digitalisation of the customer buying journey and online marketplaces to make better decisions.

I do not want to trivialise the personal challenges that people with substance abuse problems and their families face, nor do I want to suggest that the management of our car manufacturers are prone to this condition, but I do genuinely see some similarities within a critical part of our business, and perhaps also similar challenges in terms of kicking the habit.

Aftersales has long been seen as the backbone that reliably delivers profits to sustain OEMs and dealers through hard times, and are clearly the sole focus of the many independent players who have built significant businesses. 

Headline news in the Dutch press last week was that the Louwman Group had cut all ties with Stellantis, terminating the Opel and Peugeot franchises at retail level from March 1st.  This affects a number of dealerships including some acquired just two years ago, formerly Orange Motors.