The cost-of-living crisis is going to be the biggest challenge for dealers to navigate in 2024, according to Close Brothers Motor Finance’s Forecourt Foresight research.
The research, which surveys 200 motor dealers across the UK, found that cost-of-living crisis is becoming an increasingly prevalent challenge for dealers as it continues to weigh heavily on customer affordability. More than four-in-five (82%) dealers believe this will be their biggest challenge in 2024, which is a rise of 12% from 70% when compared to the previous Forecourt Foresight survey, conducted in June 2023. 40% of dealers estimate that consumer confidence will be more of a challenge as buyers become more hesitant to spend on big-ticket purchases - a rise of 5% compared to the previous survey.
However, whilst worries surrounding consumer demand may be the leading concern heading into the new year, other challenges have become significantly less of a concern for many dealers. A lack of stock availability was a primary concern for more than half (54%) of dealers over the second half of this year, which is now down to 29% heading into 2024. Fewer dealers see rising energy costs as a challenge next year, with this being a concern for a quarter (26%) of dealers, compared to 42% in 2023.
Other leading concerns for 2024:
• 15% - Increased competition from online car retailers
• 12% - Government and industry regulation
• 7% - Regulatory changes
• 7% - Staff recruitment and retention
Lisa Watson, Director of Sales at Close Brothers Motor Finance, commented: “Despite inflation appearing to be on its way down, it’s clear that the cost-of-living crisis is not showing any signs of easing in 2024.
“This is going to have a sizeable impact on how dealers shape their business strategies in the new year, as they plan how to best stock their forecourts to cater for changes in consumer demand. Data driven insights will play an increasingly important role in ensuring dealers are able to match changing trends, which will be vital to sustained sales as the year progresses.
“Growing concern surrounding customer affordability will also make the government’s revised 2035 ban on new petrol and diesel vehicles an increasingly difficult target. Our previous consumer research showed that 62% of buyers who wouldn’t consider an alternative fuel vehicle (AFV) are put off by the initial cost, which coupled with the lack of incentives announced in November’s Autumn Statement - is a figure likely to rise as the cost-of-living crisis continues to bite.”
