Have we peaked too soon?

  09 January 2017

Look past the raw numbers from the recent 2016 new registration announcement and one comment from SMMT chief Mike Hawes stood out for me. Along with predicting a five percent decline for 2017, he observed that the market had reached “peak demand” and was growing at a rate “we have seen can’t continue forever.”

Fair enough, nothing this good – in terms of post-recession activity, at least – can possibly last forever. But what if we really have reached ‘peak car’? Will buyers just continue to swap one shiny new box for another on the endless lease treadmill? Ditto for fleet customers. Where will your new customers, the ones adding not just replacing a new car, come from?

Also, at a time when car sharing businesses seem to be more popular and numerous, will the average urban dweller simply ditch the private motor car and embrace the sharing economy? If so, will you be quick enough to be the retailer who supplies the local car share company in a bid to boost your growth?

Granted, we’ve been here before in terms of the cyclical nature of the auto retailing business. But I reckon this time it could be a little different; we have new threats to contend with, such as the aforementioned sharing economy, agile start-up businesses nibbling away at traditional practices and way more consumer choice. 

Sure, market activity is bound to cool after a great 2016, but there’s no guarantee the long-term ‘recovery’ will behave in a way we can fully predict or control.

Iain Dooley

Editor, Agenda

Auto Retail Network

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