The cost-of living crisis continues to affect most if not every aspect of daily life. A perfect storm of circumstances has meant that global inflation is at its highest since 2008 and this is wreaking havoc. Rising fuel and energy prices, shortages across supply chains, rising shipping costs and the continued impact of the COVID-19 pandemic have all combined to influence a tougher economy than has been seen in a long time.
With finances and everyday living expenses becoming a concern for most consumers, people are thinking carefully about big purchases. Buying a car is no exception. It is the biggest financial spend for most people after their home.
This is driving a behavioural shift in car ownership. Indeed, according to a recent survey shared by the RAC, almost one in four car owners (23%) say they are already reducing or intend to reduce the number of cars in their family. 61% say that tightening personal finances have negatively impacted their attitudes to car ownership. Drivers are using their cars less and many are looking towards more flexible options for ownership.
Dealers need to embrace the role driver data can have in shaping their customer service offering
As a result, Mobility as a Service (MaaS) is emerging as an increasingly important trend. This puts innovative finance options at the heart of car ownership and includes everything from subscriptions and peer-to-peer services to on-demand car-sharing and car clubs, all being used more often.
The changing role of dealers
The cost-of-living crisis effects businesses as well as consumers. Dealers are also looking at ways to run their businesses more effectively and efficiently and this is where using enhanced data could play a vital role by shaping the way they work with drivers moving forward.
Looking at the proposition of MaaS on paper, dealers may initially be concerned—namely as their role in this scenario is potentially less certain. However, opportunities are there to be taken. The same transparent, live and enhanced data available to drivers can also be utilised by dealers.
The first way dealers can benefit in the MaaS scenario is using data to keep up a robust and regular maintenance and service offering for vehicles on the road. Currently in the UK, according to the RAC Foundation, cars are used only 4% of the time. This is predicted to change if MaaS becomes more widely adopted. Cars that are used more frequently will require more maintenance and dealers are best placed to support this. The capability, infrastructure and skill are all in place within dealerships; what is needed is the information required to make their service offering complete and workable and to do this properly, using data is key.
MaaS and the use of data could also benefit dealers as drivers increasingly turn to them for help and support in buying or acquiring the use of cars. After all, it is primarily the way that drivers want to own or use vehicles that will change. Many believe that dealers are still best placed to get into the MaaS business directly, as they’ve been providing cars, servicing and fleet management for decades. Again, dealers have everything in place to make this possible: the expertise, in many cases the relationship with the customer, and of course, the locations are already there. Even if just a small offering was put in place, it very much makes sense for dealers to embrace MaaS: promoting, selling, leasing, renting and servicing vehicles as always, just in a new way.
To make the most of this opportunity they simply need to broaden their business model and use this rich data to enhance their proposition to consumers and tailor offerings to their new flexible priorities. If they manage that, then they too can win in this future view of car ownership. Additionally, if this enhanced data is harnessed in the appropriate way and dealers use the information gained to work with manufacturers and finance companies more closely, it could pay dividends for all parties.
Collaboration is key
If dealers, manufacturers and finance companies can access the same ‘current picture’ data of a driver’s position as a car owner, they can then decide how best to sell to them. This will involve a culture shift, as historically these parties haven’t had the most cohesive of relationships. Here, data can play a huge role.
Drivers are using their cars less and many are looking towards more flexible options for ownership
CarCloud believes that this is possible by using data to form an all-round picture of a driver and their car and how the two work together and form patterns of behaviour. The enhanced data that can be gained via a platform such as CarCloud or via MaaS touch points goes above and beyond anything that will be held by dealers currently as it is being fed into so much more regularly. Simply put, it becomes a data series and not just data points and this provides a wealth of valuable information on drivers and how they own and manage their cars. Gone will be the days of a three-yearly phone call to check in on drivers. Instead, dealers will have a pool of active data that can be utilised and make their proposition truly robust.
If access to driver data is transparent and shared from the same source, then everyone can work together to give consumers the best experience. Initially, the finance options offered in these circumstances may seem less profitable for dealers, but if a longer-term relationship with a driver can be secured this way, then it will be more lucrative in the long run.
What is clear is that car ownership in the future will be very different to how it is now and the cost-of-living crisis is accelerating this shift in perspective. While this may present a challenge for dealers, it can also offer up opportunities. To thrive in the automotive industry of the future, dealers need to embrace the role driver data can have in shaping their customer service offering. Working more closely too, with both manufacturers and finance providers, to make the most of this data is key to their ongoing success.
