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How digitalisation can help tackle fleet car sales disruption

If you are a fleet or transport manager tasked with purchasing new stock at some point over the last two-and-a-half-years, the chances are that the Covid pandemic initially made it a difficult task. However, even though the pandemic has (hopefully) subsided, rising energy costs and a difficulty in sourcing key components needed for the manufacture of vehicles have placed a further strain on the sector in more recent times.

If you are a fleet or transport manager tasked with purchasing new stock at some point over the last two-and-a-half-years, the chances are that the Covid pandemic initially made it a difficult task. However, even though the pandemic has (hopefully) subsided, rising energy costs and a difficulty in sourcing key components needed for the manufacture of vehicles have placed a further strain on the sector in more recent times.

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Insights

Date

24th October 2022

man crossed armed smiling at the camera

Jerry Young


If you are a fleet or transport manager tasked with purchasing new stock at some point over the last two-and-a-half-years, the chances are that the Covid pandemic initially made it a difficult task.

However, even though the pandemic has (hopefully) subsided, rising energy costs and a difficulty in sourcing key components needed for the manufacture of vehicles have placed a further strain on the sector in more recent times.

During the peak Covid period, the luxury of being able to physically inspect vehicles was largely absent due to most showrooms being closed, a very disconcerting prospect for those managers responsible for buying large fleets and for spending large sums of company cash.

Indeed, the impact of Covid on fleet car sales when the pandemic was at its peak spoke for itself. The Society of Motor Manufacturers and Traders (SMMT) reported a year-on-year drop of over 15,000 vehicles when comparing the sales figures of February 2020 (45,545) and February 2021 (29,948).

While Covid’s impact on the steep decline in fleet car sales is not in doubt, it raises the question of whether motor traders that specialise in providing large fleets to companies should re-examine their sales tactics and think again about the tools they use to attract fleet managers and sell their vehicles to them.

This is especially the case with the current other pressures being faced by the motor sector, resulting in fluctuating sales figures.

Direct parallels can be drawn with other parts of the retail sector, which has seen a raft of famous stores disappear from our high streets. Shoppers turned to online platforms, while many traditional retailers responded by facilitating online shopping, click-and-collect services and home deliveries.

Those in the overall motor sector that had foreseen this e-commerce shift – which was emerging before the pandemic – are likely to have fared better than those that continued to rely on customers visiting their dealerships. It was noticeable that Aim-listed Vertu Motors revealed that it had met its £23m profit target despite three national lockdowns during the peak Covid time – and in part this was due to strong digital sales.

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You’d also be hard pushed not to have noticed a significant rise in TV advertising from motor retailers, heralding their completely end-to-end digital car-buying process as a car-buying “revolution”.

It makes you wonder whether fleet car sales figures would have fared better during the period of lockdowns and restrictions had more fleet providers offered a fully digitised service. The shift to online buying will take time and it will not be wholesale. There will always be a significant number of buyers who will want to visit a showroom, especially fleet managers who might still feel it is their “duty” to kick the tyres and touch the paintwork in person – but implementing a digital capability should be seen as a vital complementary service at the very least to enable fleet managers to carry out the end-to-end task online should they so wish.

Let us not forget, too, that selecting the new stock is just one, tiny part of the modern fleet manager’s never-ending to-do list. With vehicle maintenance, managing drivers, negotiating with suppliers, ensuring all compliance aspects are adhered to and overseeing the integration of the new stock into existing stock, I am sure many would welcome the opportunity to have an easy, straightforward, one-stop buying and finance option online.

With digital solutions offering a competitive advantage right across the sector, now is the time to act. Our own experience of working with motor retailers to elevate their digital route-to-market has highlighted them mammoth strides forward that can be achieved. Deploying digital services is not the time-consuming, expensive undertaking it once was. Bespoke automotive software solutions for the motor sector can be created in as little as four months, resulting in a level of service that will open them up to a whole new audience.

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While Covid has undoubtedly had a major impact, it has only accelerated a major digital shift that was already well underway beforehand. Traditional retailers are increasing adopting to the digital phenomenon, as have banks and fast-food outlets, who no longer rely on customers physically popping by.

Now it’s the turn of the motor sector.

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The ability to carry out all stages of procuring a vehicle online, from researching and carrying out checks, ordering customisable extras, accessing automotive finance software, signing documents, and taking delivery, is now no longer a ‘nice-to-have’. It is now an essential ‘must-have’ that should not be ignored.

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