The holiday season is upon us once again, and although we’re still working as hard as ever at Ennis & Co, with so many people taking a well-deserved week or two out to dip their toes into sea and sand, we thought we’d take a moment to pause and look back over the year so far.
But we like to collaborate here at Ennis & Co, and we wouldn’t get far without our wonderful contacts, be they clients, candidates or other industry peers. In recognition of that, we begin the first in a series of “Ennis & Co interviews…” blogs which will appear sporadically amongst our more standard fare. In these blogs we will speak to our peers to get their take on a subject, issue or hot topic.
For this blog, we have spoken to Automotive Marketing Consultant Al Clarke, who has worked with Ferrari, The SMMT and the APC in his time within the automotive sector. We asked him to summarise the year to date in the industry, based on what he has seen.
“The first thing to say is that manufacturing is the lifeblood of the industry and the economy, and the great news is that this year is has continued to be strong, with export business pretty good,” says Al, citing Mini, JLR, Nissan and Toyota as companies that are all faring well.
He continues: “Sale of product is strong thanks to low interest rates, although inevitably there will come a time when sales will slow for new product, but on the whole retail is looking good and is doing well. (Governor of the Bank of England) Mark Carney has warned that interest rates won’t stay low forever (he expects a “judgement” on this at around the end of the year) and, similarly, new car sales won’t head North indefinitely”.
In terms of the automotive industry as a whole, Al thinks that many people inside the sector know it is likely to change more in the next decade or so than it has in a long time. He believes this will be led by customer demand and changing customer behaviour and, inevitably, will impact on manufacturing as well as retail. Al believes we’re at a moment of great opportunity, a pivotal moment where retailers need to start thinking about their basic transactional and operational models to adapt to a new generation of buyers and a more fragmented, dispersed and diverse set of buyer behaviours.
“In terms of how people pay for their mobility in the first instance, I can see more opportunities for all-inclusive, fixed-price monthly tariffs for new cars. This could embrace servicing and insurance with other items as “bolt-ons”. The winners here will be the businesses that can adapt to those financial models,” Al says. “Big retailers who are quite systemised and have good processes should be able to absorb this and make their money in the mix across the scale of transactions they undertake, while the small businesses who thrive on repeat custom through really knowing their customers should be okay, but I can see the middle ground of retail potentially feeling the squeeze if radical new finance models do take off,” he believes. It’s interesting to hear Al talk about “mobility”, and when quizzed on this, it’s very clear he, like many of our peers, has noticed a different attitude towards product in the younger generations, who “want to get from A to B and don’t really care if it’s a car or some other mode of transport. They’re not growing up to be car enthusiasts”.
Like an increasing number of people we speak to within the automotive field, Al has his eye on retailers in other sectors where he thinks new customer interface models are being developed well, with startlingly good effect. “Retailers are clearly grappling with how to embrace technology, and how to deliver a service to the standard of retailers like Apple, John Lewis and others,” he believes. “These brands provide a quality of customer experience that is about a lot more than product alone. They deliver a great experience online through digital technology, but once you’ve made your order, they know how to deliver a great service and after service, too. The lack of pain should any aftersales issues arise with these suppliers is really noteworthy in comparison with our industry, and so is the seamlessness with which the pre-and post-sale service is delivered,” he thinks.
Al feels that Automotive retail is coming under increasing pressure from customers to match that degree of service and adds that: “there’s now a generation of people with purchasing power who don’t understand why it can’t be the same as Apple or John Lewis”. The big question for retail now is, how do we get there? Lots of people are starting to think of how to do it, but only a few of the newer, more visionary dealers within the sector have the agility to make the big changes now. Al points to the news last week in the Sunday Times when Lookers’ Chief Executive Andy Bruce announced that they are moving to a new model when rewarding staff, and tackling the traditional low-salary, high-commission pay structure that breeds pushy sales tactics.
Then there are the super-brands who could be at a very significant crossroads: “With Google and Apple now being associated with cars, (however that turns out) you have to think that there are serious opportunities there; they’ve got a lot of cash to invest into R&D, could sidestep the traditional retail model and provide high value goods as part of an overall brand experience, for loyal customers who trust them,” Al says.
Al summarises 2015 as another good year for the UK automotive industry, for a number of reasons: interest rates, quantitative easing, and both independent and government-led investment into engineering and related skills resulting in improved R&D and manufacture, which helps the UK in the long term. He admires the collaboration between government and industry in this arena, which is something he feels we need to see more of in the future. He notes growth in commercial vehicles as another reason to be cheerful, and the fact that “we’re also seeing more UK-built content inside more UK-built cars, so the supply chain is improving too, which all has a positive impact on our productivity as a manufacturing nation”.
And what about the people within the industry, and the demand for skills? At Ennis & Co we’re seeing an impact, too. The demand for high quality individuals is increasing, and the market is more competitive than ever, with more and more automotive companies turning to search. The need for visionary people who can disrupt the market model, bring skills from other sectors and interpret the behaviours of a newly-diverse range of buyers is critical. It’s an exciting period to be in the industry, but changes are inevitable – and as we all know, change can be difficult. If you want to talk to us about this, you can find our contact details on our website at Ennisco.com, email info@ennisco.com – or contact me directly through LinkedIn.
In the meantime, I hope you manage to have a bit of a rest over the next few weeks.
