Re:think automotive retail networks
Automotive US retail networks are under pressure – around 200,000 jobs could be lost by 2020
- Dealer profits have recovered since the economic crisis and are back at record levels – Average network profits reached 2.2% in 2013
- Margins will soon be under pressure. Volumes are less profitable than in the past, and return on sales for dealers is expected to drop at least 64% by 2020
- Strong pressure on the US dealer network: 3,800 outlets and around 200,000 jobs at risk by 2020
- Time to rethink network strategy: OEMs need to restructure their retail operations to ensure the financial viability of their partners
Automotive dealers in the US made a historic comeback in profits in an industry that was plagued by bankruptcies just four years earlier. The post-crisis recovery of automotive dealerships has certainly made this industry look attractive again. But is this revival based on solid foundations? Are the current dealer profits truly sustainable over the coming years and decades?
"We believe – contrary to popular opinion – that things are not as positive as they seem," says Thomas F. Wendt, Partner in the North American Automotive Practice at Roland Berger Strategy Consultants. "In our view, the massive consolidation of the recent past was not the end, but the beginning of the change needed for dealers to maintain healthy profit levels and for OEMs to transform their distribution networks."
For further information, please contact:
Thomas F. Wendt
Roland Berger Strategy Consultants