Are Motor Traders feeling the strain of Brexit?
A recent report issued by MHA, an independent accountant organisation has highlighted fears amongst Motor Dealers in regards to the upcoming Brexit negotiations.
Indeed, the report indicated that as many as 76% of motor traders are bracing themselves for either a decrease in profits, or expecting sales to stagnate in the upcoming year.
The negative consensus in the industry has increased by 20% from last year, in which it seems there was a bit more positivity surrounding the prospect of Brexit on the automotive trade industry.
MHA stated that concerns have been arising over the cost of staff recruitment and retention, as well as uncertainty over compliance and regulation, charges and changes that may occur over the next year or so. The study also found that dealers are hoping to rely on used car sales as the primary driving force for their revenue as opposed to brand new car sales.
Still, it must be noted that although the large majority of dealerships remain apprehensive about changes caused by the Brexit negotiations, a large populous still remain optimistic in terms of business expansion prospects – 60% of dealers that were surveyed stated that they had intentions to grow their business over the next 12 months, despite uncertainty and doubt in the marketplace.
Steve Freeman, Head of the MHA Motor Sector stated: “I am not surprised to see the survey results confirming the marked change in dealer confidence levels we have heard from our clients recently. The industry is really going through a period of change and I do think that online developments may start moving at a pace now. The continued strength and resilience of the sector is certainly dependent on all parties (including manufacturers and their franchise partners) working together to ensure a sustainable business model for the future.”
Sue Robinson, Director at the National Franchised Dealers Association also added to this, stating that:
“We have entered challenging times, but our sector is resilient and used to coping with difficult and unexpected situations. Going forward, it is encouraging to see that the majority of dealers feel positive about their partners’ strategy for AFVs. We are also pleased to see that there is a very high level of awareness of the importance of online retailing. These two elements are likely to become two predominant aspects of car retailing in the near future and franchised dealers’ flexibility and ability to adapt will help them continue to operate confidently and successfully.”