New year blues for car manufacturers as sales plunge to six year low

New year blues for car manufacturers as sales plunge to six year low

Posted: by Stericycle on Jan 10, 2020

The new year is always a time for reflection and thinking about ways that we can be better than the previous 12 months. And on the back of new figures from the Society of Motor Manufacturers and Traders (SMMT) which show new car sales in the UK dropping by two percent to 2.31m last year, one thing all manufacturers should be thinking about is how they can improve their connection with customers post-purchase to build a more lasting and fruitful relationship.

The SMMT data shows that economic uncertainty from Brexit, and stricter regulations on emissions which have made diesel vehicles less attractive, are the two main reasons for sagging sales. The optimistic view is that this is a mere blip and that 2020 will see a return to growth. However, as the adage goes, manufacturers should expect the best but prepare for the worst. If the economic climate convinces consumers to hang on to their cars for another year or two more than they would otherwise, even the best advertising campaigns will struggle to shift the needle.

Yet there is a significant silver lining. As new car sales slow, there are more opportunities for aftermarket sales as consumers look to take better care of their current vehicles. And there is plenty of scope to increase market share for all sorts of services. For example, our research last year showed that only 25 per cent of motorists go to manufacturer franchises for their MOT.

It’s well-established that a key reason for customers preferring independent garages is because they feel they have a better relationship than they do with an OEM. Many motorists also believe that the quality of work at main dealers is higher and that they are more professional – important considerations if you’re holding off on a new purchase and need your current vehicle to remain road-worthy.

The upshot of these findings is that since OEMs already have a well-earned reputation for delivering excellent service, all they need to do to bring in a much larger slice of the aftercare market is improve their relationship with customers.

This means anticipating customer needs through predictive analytics, using multi-channel communications to talk to them with their preferred method, and follow-ups to confirm receipt and increase the likelihood of bookings. Not only can building a relationship like this boost revenue but it increases the impact of communications by demonstrating you know the customer and are proactively considering their needs. 

Right now, the majority of UK motorists prefer to go to an independent garage, but there is no need for this to remain the case moving forward. By improving their aftercare customer relations and communications, OEMs can win the loyalty of many potential customers who are trying to prolong the life of their vehicle during a time of economic anxiety. Many OEMs are already employing this technology and seeing substantial improvements in their ROI as a result. This new year, manufacturers should all make a resolution to review their aftercare processes and see how going that extra mile can make all the difference.

At RPM we know that the aftersales market is constantly evolving because we do our research.  

You can read more about how consumers are influencing the automotive aftermarket in our RPM insights reports You will be surprised to read how simple it is to win back business.