Tier 4, targets and positivity
20 December 2020
The air of resignation from the SMMT’s Mike Hawes on Saturday night was obvious. Auto retail has been faultlessly Covid-secure since showrooms reopened… yet, in London and the South East’s new Tier 4 restrictions, they are being forced to close yet again (as they are in Scotland, Wales and Northern Ireland).
“But you can still buy your Christmas tree.”
Coming at the end of the year means targets will be thrown into disarray. In 2020, more than ever – due to OEMs facing the first year of strict CO2 targets. Some are running things very close to the wire, due to the disruptions of Covid and unexpected challenges such as recalls and a halt on sales of some higher-CO2 vehicles.
But there’s actually evidence retailers are being seen as the saviour for OEMs facing swingeing fines. Several executives have told Auto Retail Agenda that deals on zero-CO2 electric cars are outstanding, something backed up by our own research. It seems some brands are concluding it’s better to sell a car even at a zero margin to pay hefty fines to the European Union for missing your CO2 targets.
This should give auto retailers hope. As, indeed, should the fact that we’ve been here before – and have continually risen to the occasion. Since March, 2020 has proven OEMs and retailers can work together in positive, collaborative and sometimes unexpected ways. Rather than being the end of the car dealer, this year has proven to brands just how vital auto retail is to them.
Yes, things are going to change. Covid has seen a burst of activity in online sales, while showroom closures forced retailers to adopt click and collect. The industry has managed both trends incredibly successfully. Now, whatever restrictions are in place, auto retailers are ready and able to respond.
OEMs have also been evolving during 2020, such as how they renumerate retailers during new and challenging times. If anything, this could bring forward the seemingly welcome shift towards an agency model – as the least profitable part of auto retail is the initial sale, if that can be simplified and guaranteed, executive attention can instead be fully focused on the areas of the business that do generate significant returns.
Be in no doubt, our industry responds quickly to whatever life, and particularly Covid, throws at it. Marshall’s Daksh Gupta said on Saturday evening that sites affected had already been identified and global communications were nearly complete for internal and external stakeholders. Executives were to ratify them just hours after the announcements: “That’s how we roll.”
Mr Hawes is understandably frustrated, as we all are. But the brilliance of the auto retail industry is how it continually steps up to the mark and takes on challenges such as this. And if they can lead to better, healthier, more effective ways of working in 2021 and beyond, maybe everything we’ve suffered because of Covid won’t have all been in vain.