Constellation Automotive’s recent investments in UK franchised dealer groups poses three Big Picture questions about the future direction of the automotive retail sector.
Is this the prelude to a wave of consolidation of dealer groups? Could this be the way to future prosperity for retailers as franchise agreements transition to an agency model? How will brand owners adjust their retail partnership strategy to ensure a balanced portfolio between groups?
Retailers and brand owners are discussing them right now as they plan their next steps through the transition from traditional automotive to the provision of mobility.
Whilst it is impossible to provide answers to the questions above with absolute certainty, there is one that I do want to tackle: What kind of leadership skills will be needed for companies to flourish in retailing’s rapidly transforming world?
Constellation’s shopping spree offers a fascinating glimpse of a future mobility provision model. Having already established a vertically integrated used car marketplace, Constellation now has access to new cars and can create an entire ecosystem where it starts with a new vehicle and then cycles it through multiple ownerships or uses, retaining the value at each level.
Consider for a moment the scale of the integration project as Constellation brings together 164 Marshall Motor Group franchise dealerships in 37 counties with its existing Cinch, BCA and We Buy Any Car businesses. It is a compelling proposition requiring full, seamless integration between different platforms, with all the extraordinary operational complexity that brings.
It requires the capacity and systems to integrate physical and digital sales and allow vehicles coming into one platform to be triaged and then moved and sold through a different channel. Getting all those moving parts to come together requires investment not just in technology but in people with the right leadership skills.
Today’s retail businesses need people who are not just capable of managing a brand but able to lead brands at scale and pace. The skillset required is demanding, to ensure the core business of workshop, showroom, customer and brand partners are managed properly within the framework of a PLC, and in an industry evolving from franchise to agency model while moving from a showroom-based sales model to an omni-channel model.
The automotive retail sector is changing dramatically before our eyes and needs visionary business leaders at board level along with phenomenal operational deliverers who can bring a portfolio of brands together and ensure the business is bigger than the sum of its parts.
Opportunity is knocking for talented people like never before, because a constellation is nothing without its stars.
