The Spring Edition of Grant Thornton’s automotive review has predicted transformative change for vehicle manufacturers in the coming years, as a number of interlinked factors start to converge.
Tougher environmental targets are forcing new ways of working, while the demand for electric vehicles means ever-greater investment in low-emission technologies.
Both are impacting profits, and many OEMs are now striving to make cost savings elsewhere.
This could see the introduction of a direct sales model process in the B2C market. Stellantis, Mercedes-Benz and Volkswagen have all confirmed their intentions to go down this route, believing it will open up more revenue streams, such as upselling, while also generating a closer relationship with customers.
Furthermore, this sales model could offer manufacturers a route into the used car market, initially through part exchange but then, potentially, through direct sales. The review explains that the used car market is an area in which VMs are eager to play a greater role, recognising the potential profits that can be generated through the sale of car finance and spare parts.
Meanwhile, Grant Thornton also predicted that the subscription model would become ever-more popular in the near future, with Volvo confirming that half of its vehicle production will be on subscription by 2025.
Helen Dale, Industrials and Automotive restructuring partner at Grant Thornton, said, “As these dynamics play out, companies in the downstream automotive industry will be driven hard to adapt to change. Those unable to adapt quickly enough risk a heavy price.”
