The Future of the Car Industry - Electric or not?

Rtn Rex introduced our speaker for the evening , Paul Garratt who is currently responsible for used car operations for a company with 18 dealerships, overseeing £50–60 million in inventory and leading a team of 12. Since starting in 1988, he has seen major industry shifts, including rising car prices and improvements in vehicle features. His career began at Park Road Garage, followed by roles at Oakley Garage and Vindis, now the UK’s premier Volkswagen dealers.

Paul went onto to say that the British car industry declined after the post-war boom, mainly due to mergers and market changes. The 1980s brought more brands, better reliability, and safety advances, but dealer networks shrank. Marketing relied on local press and unpredictable stock supplies. The 1990s saw supercars, diesel popularity, and mobile phones transform dealership work. Moving into the 2000s, internet sales and hybrid vehicles became prominent. In the 2010s, electric vehicles grew while diesel declined, regulations tightened, and the used car market adapted. By the 2020s, electrification targets have outpaced demand, leading to oversupply and rapid depreciation of EVs, with charging infrastructure and policies presenting new challenges.

Dealers are often required to register unsold EVs, contributing to falling prices and practical difficulties with charging. Urban residents face further barriers, including limited access and fluctuating charging costs.

Electrification remains government policy despite consumer reluctance, creating problems for the industry. Historic business models based on improving and selling vehicles for profit have become less viable. After COVID-19, the market initially surged, but tighter data-driven practices now mean dealers focus heavily on KPIs to manage stock and forecast needs. Used car inventories are 28% lower than in 2019, yet sales have increased, making sourcing quality vehicles difficult and reducing margins.

Companies like Cinch, Cazoo, Motorway, and new tech-driven platforms have disrupted traditional dealerships. Heavy investment in marketing and efficient processes help them compete, but also challenge dealer profits and part-exchange sources. The proportion of part exchanges has dropped significantly since the 1980s.

New car inventory has decreased; customers now order cars and wait for delivery rather than choosing from large stocks. Used car purchases require significant funding, with frequent fraud checks complicating transactions. Investments in individual vehicles can be substantial.

In summary, the automotive retail sector has undergone dramatic transformation over his career, driven by market forces, technological advancements, shifting government policies, and evolving consumer behaviour.

Rtn Paul