UK dealers are facing a once-in-a-generation challenge as electric vehicle (EV) disruption, aggressive new entrants and rising customer retention standards converge, according to Automotive Data Solutions (ADS).
The data provider warns that many retailers are unprepared for the scale of change already hitting the market.
A combination of profit pressure from EV adoption, the arrival of Chinese brands and the expansion of US dealer groups with advanced marketing strategies poses an unprecedented threat.
ADS said dealers that continue to rely on low-margin new car sales while neglecting higher-margin aftersales risk losing ground rapidly.
Operations director Jon Sheard said (pictured): “So far, dealers have been protected from more sophisticated competition but that is changing. Business as usual is no longer sustainable.”
ADS’s analysis of dealer databases reveals key weaknesses:
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65% of MOT dates are listed incorrectly in dealers’ customer databases
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A 60% increase over the past 10 years in failure to register keeper changes
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Just 20% of marketing activity targets aftersales, despite it delivering the
highest conversion rates.
Sheard added: “We are witnessing a fundamental transformation of the market.
“The EV transition alone is a major threat to profitability due to reduced servicing needs, but that is only part of the story.
“The influx of Chinese EV brands will reshape the UK car parc and US-owned retailers are introducing proven American customer retention models.
“These operators rely on clean, segmented customer data. Many UK dealers are still marketing to the wrong people.”
ADS highlights that booking a safety recall typically drives more than £300 in additional revenue, yet many retailers cannot capitalise due to inaccurate customer contact details.
In contrast, US groups are shifting to a 50/50 marketing split between sales and aftersales, focusing on MOT, recalls and servicing to build customer lifetime value.
Sheard concluded: “When multiple threats hit at once, as we saw in 2008, the market can shift rapidly.
“Dealers who act now to improve data quality and segmentation will stay competitive. Those who don’t risk being left behind.”