From intensifying competition and rising costs to changing customer expectations and the transition to electric vehicles, dealerships face difficult decisions about where to invest and how to protect profitability.
At AM’s Regional Roundtable, sponsored by POD, industry leaders explored why simplifying the customer journey, building EV expertise and retaining talented employees could prove decisive over the next 12 months.
The biggest challenge facing automotive retailers may not be the arrival of Chinese manufacturers, the transition to electric vehicles or even the relentless pressure on margins. It may be the growing complexity of selling a car.
That was one of the clearest messages emerging from AM’s Regional Roundtable, held at Horwood House near Milton Keynes, where franchised and independent retailers joined EV specialists and representatives from charging provider POD to examine the industry’s immediate commercial priorities.
While opinions differed over the speed of electrification and the sustainability of emerging business models, participants broadly agreed that dealerships were being asked to deliver more expertise, flexibility and convenience with fewer resources.
Yet the discussion also revealed opportunities for businesses prepared to challenge conventional thinking about customer relationships, staff development and the commercial value of specialist knowledge.
Customers are testing the traditional sales model
For Michelle Breffitt, co-founder of Women Drive Electric and director of Car Cosmetics Derby, the starting point is recognising that customers no longer fit neatly into the industry’s established categories.
“Now is a great time for the automotive industry to rethink its relationships with customers,” she said. “One size doesn’t fit all. Customers want to discuss whether they should buy privately, through their company, lease or perhaps buy used. They’ve got so much choice.”
The problem, she suggested, was that dealership structures and sales incentives had not necessarily evolved to accommodate that choice.
Nathan Tomlinson, managing director of Devonshire Motors, identified a related problem: employee fatigue.
“We’ve got fewer people, but customers want to spend more time with them. They want a blended approach, digital and physical, and expertise across different channels. That puts a lot more pressure on fewer people.”
For Tomlinson, the industry has also made vehicle pricing unnecessarily complicated, with manufacturer contributions, finance incentives and conditional discounts creating offers that are difficult to explain.
“By the time you get into that cycle, you can’t market it, the consumer can’t understand it and the sales executive can’t sell it,” he said.
Neil Tonks, group aftersales director at Pentagon Motor Group, was equally forthright about the barriers traditional retailers create. “We do everything fantastically well to make sure the customer doesn’t buy from us,” he remarked.
He recalled encountering a customer still waiting in a showroom four hours after arriving, highlighting how established sales processes can undermine an otherwise positive experience.
The need to simplify transactions was particularly pressing given escalating operating costs, he argued, with automation and artificial intelligence offering opportunities to improve productivity without sacrificing personal service. However, simpler transactions also require greater commercial flexibility.
POD automotive sales manager Ed Breeze questioned the continuing separation of conventional retail and leasing, recalling occasions when customers interested in contract hire were directed to a specialist rather than helped immediately.
Lee Palmer, group sales development manager at TrustFord, explained that the business had responded by creating its own leasing operation and expanding the capabilities of its sales teams. The objective was to ensure customers could access the purchasing route they preferred without leaving the dealership.
That principle is also central to EZOO’s salary sacrifice proposition. Co-founder and chief executive Lash Seranna explained that his company had developed technology allowing dealers to retain the vehicle sale, funding, margin and customer relationship while EZOO provides the salary sacrifice infrastructure. “
The dealer keeps the margin, the funding and the customer. We’re wrapping the salary sacrifice around the product,” he said.
For Seranna, overcoming the traditional tension between retail and alternative acquisition channels could create an important additional source of business.
Defending profitability in an increasingly crowded market
Competition from Chinese manufacturers raises questions about whether established brands can sustain their historic positioning as customers increasingly prioritise affordability and equipment.
Sheraz Rashid, operations director at Steven Eagell Group, argued that the strength of established franchises should not be underestimated.
His business remains committed exclusively to Toyota and Lexus despite the arrival of new entrants. “Toyota has always been expensive compared with some other brands,” he said. “But we shouldn’t underestimate the power of the brands we represent or the names of our franchises in their local areas.”
Rashid also questioned whether the attractive commercial terms currently encouraging dealers to take on emerging franchises would survive once manufacturers demanded more substantial premises investment and reduced margins.
With limited overall market growth, he believes the industry would face further consolidation and increasingly difficult decisions over representation.
Nevertheless, he maintains that retailers could improve profitability by concentrating on operational fundamentals rather than becoming distracted by every market development.
For Steven Eagell, which sells around 50,000 vehicles annually, even a modest improvement in enquiry conversion could produce significant additional earnings.
That discipline is particularly important as retailers confront changing perceptions of value.
Richard Norris, managing director of used EV specialist Drive Green, argued that customers were not necessarily choosing the cheapest vehicle but the one offering the strongest overall proposition.
This distinction was reinforced by Breeze, who pointed to the increasing equipment levels of newer entrants compared with established premium brands, where desirable features have traditionally required expensive options.
The implication was clear: established manufacturers and their retailers must find more compelling ways to demonstrate value beyond the badge.
EV knowledge offers a genuine competitive edge
Despite wider concerns about margins, the independent EV specialists around the table reported encouraging demand.
Norris described a particularly strong used EV market, although he cautioned that healthy volumes did not automatically translate into profitability.
“The opportunity with EVs is to be better than everybody else,” he said. “That involves investment in training and using technology to do as much of the heavy lifting as possible.”
He believed retailers had an opportunity to distinguish themselves through more informed customer conversations, particularly by understanding daily mileage, charging arrangements and individual lifestyles.
Rupesh Kanabar, director of Autosphere Group, whose independent dealership now derives around 80% of sales from pure electric vehicles, was equally convinced of the importance of product expertise.
He described customers arriving after visiting competitors who had been unable to answer relatively straightforward questions about range, charging, warranties and servicing.
“When a customer comes through the door, we should be able to answer their questions without hesitation,” he said. “The moment you say, ‘Let me look that up’, you’ve lost some value because the customer can look that up themselves.”
Kanabar said his team continually researches different manufacturers and technologies to ensure that customers receive authoritative answers, while keeping transactions straightforward.
At Kesgrave Cars, director Alex Davison described another important shift in customer behaviour. Where buyers previously arrived knowing exactly which EV they wanted, increasing numbers now visit specifically to explore electric motoring and seek recommendations.
The business has also adapted its approach to stock profitability as competition for desirable used EVs intensifies. Rather than judging every vehicle against a traditional percentage margin, Davison increasingly considers how quickly it is likely to sell.
“If you’re making 5% but selling it in 14 days, that can work,” he explained. “It’s now about percentage per day.”
Norris offered a contrasting caution: rapid stock turn should never become an end in itself. “Margin is everything. There’s no point selling lots of cars really quickly for no money. You become a charity.”
Together, their observations demonstrated the different commercial judgements required even among successful EV specialists.
Investment in aftersales will determine the winners
The transition to electric motoring is also reshaping dealership investment priorities.
Palmer described the practical difficulties of introducing heavier workshop lifts, installing chargers and ensuring technicians possess the necessary qualifications.
TrustFord had expanded charging provision at one location from three units to ten, illustrating the scale of infrastructure required as EV volumes increase.
Tomlinson acknowledged that Devonshire Motors had experienced declining workshop productivity as its EV parc increased, although higher recovery rates reflected the growing commercial value of specialist expertise.
Meanwhile, Tonks described Pentagon’s investment in independent battery health testing as a means of increasing consumer confidence and creating additional aftersales opportunities.
The group is also exploring AI-assisted diagnostics and automated job-card preparation to reduce technician administration and improve efficiency.
Rashid warned that protecting aftersales profitability would become increasingly important as EV servicing requirements reduced traditional workshop revenue. “Aftersales is the gift that keeps giving today,” he said. “Over the next few years, it’s going to be pivotal to driving profitability.”
Steven Eagell is consequently exploring longer service plans and additional workshop services to strengthen retention.
The importance of people as an asset
For Tomlinson, Devonshire Motors’ greatest retention asset is its long-serving employees and the personal relationships they have established.
“Our service manager knows most of our customers after 20 years,” he said. “Those relationships make it much harder for customers to drift elsewhere.”
Palmer similarly emphasised TrustFord’s commitment to apprenticeships, school partnerships and employee development, arguing that retaining experienced colleagues was often more valuable than continually recruiting replacements.
Breffitt however questioned whether traditional sales roles and reward structures remained appropriate for employees now expected to possess an increasingly broad range of skills.
Her observation captured a central tension running throughout the discussion: dealerships are undergoing fundamental technological and commercial change, yet many of the structures governing how people work remain familiar.
For the retailers around the table, the challenge over the next 12 months will be to close that gap.
The businesses most likely to succeed may not be those investing most heavily in technology or securing the greatest number of franchises, but those able to simplify the customer experience, develop genuine expertise and retain the relationships that competitors cannot easily replicate.
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