Talk Morgan Forums Thread Like Summary - A straw in the wind

Called in at the Cardiff Merc dealer this week - wanted to look at an SLK, but they didnt have one. Not surprising.

But what was surprising was to find that they had given up half their dealership buildings and forecourt to BYD who had a selection of both new and used cars there. Cardiff is a sort of capital city. There is quite a bit of money about, and Mercedes is still the choice of the comfortably off. So the fact that the dealership thought it sense to use half their facility to sell cheapo Chinese tat really made me wonder just how hard the car market is these days

The British motorcycle industry was killed by complacent manufacturers believing that customers would continue to buy British and not be tempted by cheapo Japanese tat. The world of business is strewn with the corpses of once mighty companies who thought their customers would continue to buy what they had always bought.

Maybe the Mercedes dealer has realised how the market is changing and is changing along with it? Seems like a sensible strategy.

We do have to differentiate between the vendor (JAgUAr, BYD etc) and the reseller chains (Vertu and so on) as they have different aims. Both are having challenges.

Margins on new cars tending to 3%, money on ever more expensive servicing and parts being needed for profit etc.

The smaller dealership chains seem to be getting absorbed into ever bigger chains due to the need to gain volume with the vendors for preferential pricing? Care moving to cut-throat profit driven decisions in most cases for after care.

Add the reduced service requirements of BEV vehicles and it gets even more interesting.

I see big changes in both vendors and channel over the next five years. Direct selling with commission, following Tesla forcing this into the market?

I think it will get very difficult for the likes of Mercedes, Audi, VW, BMW and Porsche. They are selling a premium product, largely based on the power of the engine, only to find that a relatively cheap electric motor from China can now deliver better performance. Cars will become increasingly like white goods with little differentiation between brands other than how big they can make the touchscreen.

The German brands have large prestigious showrooms but will struggle to finance these unless they can charge large sums for the reduced amount of service work EV's require.

I was just quoted £400 to change a front wheel bearing on a (rear drive) Smart For2 EQ. I googled the cost of a new bearing when I was stood in the dealership to find that I could buy one for £27, so asked the girl to explain where the other £373 was going. She just shrugged her shoulders and said that's what they have to charge.

My suspicion is that the days of the big prestigious dealerships will come to an end - as for my bearing, I will do it myself.