What about digitalisation in the car trade in 2022?

The transformation in the automotive industry continues to progress. Dealers must also recognise the signs of the times and invest more in digitalisation. This is the only way they can stand up to the growing competition. In addition, a car dealership should not disregard the advantages that are presented to it on a silver platter, as it were, by its special clientele of buyers.

Digitisation in the car trade - a red rag for many dealers

Both on the subject of software and on the subject of electromobility, car manufacturers will have to do significantly more than before in order not to miss the boat. In the vehicle trade, however, a slightly more positive trend can be observed: Already more than 50 % of German car dealers invested in the digitalisation of their business last year, which led to an increase in turnover on balance. Businesses that are willing to invest are ahead of the game here; they had a significantly better bottom line than their competitors who had invested little or not at all in digitalisation. There are many other reasons for the slump in turnover in the automotive industry.

Motor trade in upheaval: higher prices in a difficult market

Due to delayed production at many manufacturers, it was mainly the long delivery times that caused sales losses last year. Many dealers also face the challenge of keeping their vehicle inventory competitive. To improve their competitive situation, car dealers cannot avoid raising their prices for used and new vehicles. They see their future in a fairly clear picture: a majority of car dealers expect the demand for vehicles to be greater and therefore the development to be positive. 60 % of them managed to achieve higher prices for their used vehicles last year, compared to just 20 % two years earlier. However, only every fifth dealer expects a positive development for 2022. A similarly high number believes that sales will stagnate at the level in the coming year or increase only slightly. They expect that only the return on used cars will be somewhat higher.

Strongly fluctuating sales figures unsettle car dealers

In 2020, the pandemic already led to an extreme slump in sales figures, and last year they fell again by about 2.5 %. A decisive influence is the current shortage of semiconductors, which is causing a lot of trouble for the car industry. Only car manufacturer BMW was able to counteract the negative trend in the industry somewhat and recorded a low growth rate of 0.3 %. In 2021, the number of new registrations fell across Europe. Only 9.7 million new vehicles were registered this year. In comparison: in 2019, the number of new registrations was 3.3 million higher than the year before.

When it comes to digitalisation, many car dealers are still hesitating for too long

Online sales of all kinds of products have skyrocketed thanks to Corona. But the automotive industry, especially the dealership sector, is very hesitant about online offers. In doing so, car dealers are acting in the exact opposite way to what their customers want. Many car dealers perceive digitalisation as threatening, as a 2020 study by the Nürtingen University of Applied Sciences (prepared jointly with the Central Association of the German Motor Trade) shows.

According to the survey, dealers are far too passive. Only a quarter offer online sales processes for new cars, and even fewer for used cars. In contrast, most customers can very well imagine buying both new and used cars on the internet.

Not least because the Corona pandemic has led to a rethink in purchasing behaviour, prospective buyers are also very open to internet offers of vehicles.

To close this gap, a car dealership today has numerous options. For example, they can optimise after-sales processes and offer extended mobility services.
The car trade in particular has the best prerequisites here, because it enjoys the greatest trust among customers. They value personal advice, which is a trump card that car dealers should definitely use.

Ultimately, there is no way around using innovative technologies such as artificial intelligence in order to remain attractive with one's offers and to initiate an increase in sales. Driving experience alone is no longer enough to sell a car.

Any more questions? Would you like more information? We look forward to hearing from you.

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