PROFESSIONAL services giant KPMG International has painted a bleak picture of the future of dealerships, surveying the global automotive industry to find that an increasing number of car industry executives are adopting the view that car-makers will take over the dealer’s role.

At a time when the relationships between carmakers and dealers in the Western car market is becoming increasingly fractious, it is disturbing for dealers to see that an increasing number of car company executives think they can do a better job than dealers.

In a further warning sign for dealers (and car-makers) the KPMG Global Automotive Executive Survey 2017 also reports that, in less than 10 years, more than half of today’s car owners would not want to own a car with a majority saying they will not miss a car.

But it is not all gloom. The survey shows an increase in consumer belief in the importance of the dealer, stating: “Interestingly, car retailers have gained significant importance in the opinion of the consumers”.

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HIGHLIGHTS OF THE SURVEY, NOW IN ITS 18TH YEAR, ARE:

• More than 40 per cent of executives believe that the car-makers will take over direct customer relationships from dealerships, up from 33 per cent in 2015.
• But when consumers were asked the same question, 28 per cent of consumers favoured the car dealer as handling customer relationships.
• Only 16 per cent of executives said that information and technology companies – such as Google – would take control of direct customer relationships.
• 74 per cent of executives say autonomous technology and mobility as a service – car-sharing, ride-sharing and so on – will take priority by the year 2025 and lead to many motorists turning their back on vehicle ownership.
• 85 per cent of executives “absolutely or partly” agree that a car’s digital systems – infotainment, connectivity and mobility services – will generate higher revenues than the car’s hardware.

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KPMG head of automotive in the UK, John Leech, said: “Today, car-makers already make substantial profits from the sale of consumer finance and annual vehicle insurance”.

“This will grow in the future as innovative services such as remote vehicle monitoring and the integration of the car as a focal point in people’s ever more connected lifestyles are demanded by consumers,” he said.

“Carmakers’ success will not be evaluated solely on the quantity of vehicles sold, but on the customer value over the whole lifecycle – especially when the digital ecosystem will be ready for the market.

“So OEMs need to rethink. More than three out of four executives believe that one connected car can generate higher revenues over the entire lifecycle than 10 non-connected cars.”

GoAutoNews Premium will publish further findings of the survey in coming editions.

* KPMG’s Global Automotive Executive Survey an annual assessment of the current state and future prospects of the global automotive industry. In this year’s survey, almost 1000 senior executives from the world’s leading automotive companies were interviewed, including car-makers, suppliers, dealers, financial services providers, rental companies, mobility

services providers and companies from the information and communication technology (ICT) sector. It also surveyed more than 2400 consumers from around the world to give their perspective and these have been compared with the opinions of the interviewed automotive executives.

By Neil Dowling