Contractors & Construction 
Financial Services 
Healthcare & Beauty 
Hospitality & Leisure 
Manufacturing 
Media and Marketing 
Motor 
Motor Trade 
Plant 
Professional Risks 
Property 
Technology 
Transactional Risks 
Travel Risk Professionals In this article we take a look at how the COVID-19 pandemic has changed the motor trade sector operates in the UK. The pandemic made significant changes to the industry, including a shift to selling vehicles online, a decreased demand for cars, and a shortage of parts. But it’s not all bad news; We’ve seen more people interested in electric cars, we’re getting better at using technology, and there’s even been a boost in used car sales. This article explores these big changes, explains how we’ve managed to keep up, and gives some thoughts on what’s next for the industry following the pandemic.
Shift to Online Sales
The COVID-19 outbreak led to big changes across various industries, including car dealerships in the UK. In order to help keep people apart and reduce touch, car sales had to move primarily online.
Before the pandemic, the experience of buying a car was mostly in-person, with customers usually visiting dealerships to view, test drive, and purchase vehicles. However, the onset of restrictions meant that dealerships had to quickly transition to online platforms to keep sales. Many retailers quickly adapted by trialling online showrooms, allowing customers to explore and interact with a wide range of vehicles online, with images, detailed specs, and 360-degree views.
The move to online sales also saw the start of contactless sales, where customers could complete their purchases without ever needing to visit a dealership. This included online financing arrangements, digital paperwork, and even home delivery of vehicles. Some dealerships also provided live chat support and video consultations to ensure that customers still received a personalised level of service.
However, this shift has expanded the reach of dealerships, allowing them to engage with a national customer base rather than being confined to just their local area. It has also led to a stronger focus on digital marketing and online engagement. Plus, to help those customers that were missing viewing and experiencing cars in person, some dealerships began to offer home test drives, where sanitised vehicles were brought directly to the customer’s door.
Supply Chain Disruptions
One of the most significant issues that stemmed from the pandemic was supply chain disruptions. As countries implemented lockdowns and travel restrictions, global supply chains were severely impacted. Car manufacturers and suppliers faced production delays, transportation setbacks, and shortages of essential parts.
This caused difficulties for repair workshops and garages in sourcing car parts. Whether it was a simple oil filter or a complex electronic part, essential items were less available. As a result, repairs and maintenance services were often delayed, leaving customers frustrated and vehicles off the road for longer periods of time.
Garages had to adapt by exploring alternative suppliers, seeking local sources, or even refurbishing existing parts to keep vehicles working. However, these workarounds were not always an option, especially for specialised components or newer car models. Some repair shops faced the difficult decision of turning away customers or significantly extending repair timelines.
The impact was not just on repairs either. New car production also suffered, leading to delays in the launch of some models. Customers who had preordered vehicles faced uncertainty, and dealerships dealt with managing customer expectations.
Looking ahead, the motor trade industry is reevaluating its supply chain strategies. Changing suppliers, increased buffer stocks, and a focus on local sourcing are continuing to become more common.
Reduced Commuting
The COVID-19 pandemic dramatically altered commuting patterns, with remote work life and lockdown measures significantly reducing the number of people traveling to offices. As offices closed their doors and employees set up home offices, the daily rush-hour traffic that once filled roads and motorways disappeared. This shift had a direct impact on fuel sales at petrol stations.
Usually, the daily commute to work accounts for a substantial amount of fuel consumption. Whether by car, bus, or train, millions of workers rely on fuel to get to their workplaces. However, with remote work becoming the norm, the need to fill up at petrol stations has decreased significantly.
Petrol stations, which had previously been busy, suddenly saw fewer customers. The drop in fuel sales not only affected their income but also disrupted their supply chain. These stations operate on tight schedules, and reduced traffic meant they struggled to maintain their previous revenue. Some stations even had to temporarily close or reduce operating hours due to the lack of demand.
However, the pandemic impacted more than just petrol stations. Oil refineries faced decreased demand for their products, leading to production cutbacks. Fuel distributors and transport companies had to change their production to accommodate the reduced need for fuel. On a more positive note though, environmentalists noted a temporary improvement in air quality as fewer vehicles were emitting pollutants into the air.
Increased Demand for Used Cars
The economic uncertainty triggered by the COVID-19 pandemic had a huge impact on consumer behaviour, particularly in the motor trade. As many households experienced a strain on their financial freedom, prospective customers had to reevaluate their priorities and budgets. This resulted in an increased demand for cheaper alternatives and used cars.
Several factors contributed to this trend. First, the strain on the economy led to job losses, reduced incomes, and financial anxiety. As a result, customers became more cautious about large purchases, including new cars. The excitement of a brand new vehicle lost some of its appeal as people favoured more practical solutions that fit their lower budgets.
Second, supply chain disruptions affected the availability of new cars. Factory shutdowns and delays in production meant that many models were in short supply. Because of this, buyers looked into the used car market, which offered a wider variety of options. Used cars offered a cost-effective alternative, allowing buyers to enjoy a new vehicle without breaking the bank.
Third, the perception of used cars shifted. Previously, some buyers hesitated to consider used vehicles due to concerns about reliability, maintenance costs, and outdated features. However, as the pandemic continued, customers realised that many modern used cars came with low mileage, extended warranties, and advanced safety features. The stigma associated with buying used vehicles faded, and buyers recognised the value of purchasing a slightly older model that met their needs.
Focus on Hygiene and Safety
The onset of the COVID-19 pandemic brought on an extremely high focus on hygiene and safety, particularly in industries where close contact is unavoidable, such as the motor trade. Garages and workshops, recognised as essential businesses, had to quickly adapt to ensure the safety of both their staff and customers. There were many protocols put in place to manage this, such as:
- Hygiene Protocols: Garages and workshops introduced intense cleaning routines, with frequent sanitisation of all surfaces, tools, and equipment. Hand sanitisers were made available all around, and customers were encouraged to use them when entering and leaving.
- Personal Protective Equipment (PPE): The use of PPE became standard practice. Staff were equipped with masks, gloves, and face shields, to help keep them and others safe. Customers were also requested to wear masks during their visits.
- Contactless Services: Many businesses trialled contactless services to minimise physical interaction. This included key drop-off and collection boxes, online or over-the-phone service bookings, and contactless payment methods.
- Social Distancing: Layouts were changed to ensure social distancing could be maintained. This often meant limiting the number of customers inside the garage and reorganising waiting areas.
- Vehicle Sanitisation: Vehicles were thoroughly sanitised before and after servicing. High-touch areas such as steering wheels, gear sticks, and door handles were given particular attention.
- Staff Training: Employees received training on the latest health guidelines and best practices for preventing the spread of the virus. This ensured that all staff members were aware of how to protect themselves and their customers.
- Communication: Clear communication with customers about the new measures was crucial. Garages used signage, social media, and direct communication to inform customers of what to expect and how to prepare for their visit.
These measures, initially reactive, have become a new standard, reflecting a wider shift towards better health consciousness in the motor trade industry. The emphasis on hygiene and safety has remained a priority, ensuring that garages and workshops continue to be seen as safe and responsible businesses.
Shift to Electric Vehicles
The COVID-19 pandemic has definitely helped create a trend toward electric vehicles (EVs) and hybrids, emphasising the need for sustainable cars. The lockdowns and reduced economic activity during the pandemic led to a noticeable decrease in pollution levels, making the environmental benefits of EVs more apparent to people.
- Increased Environmental Awareness: The clear skies and cleaner air during the lockdowns served as a clear reminder of the impact fossil fuels have on the environment. This heightened awareness has increased consumer interest in EVs, which offer a cleaner way to drive around.
- Government Incentives: Recognising the need for greater environmental awareness, the UK government has introduced various incentives to encourage the adoption of EVs. These include tax rebates, grants for purchasing EVs, and investments in charging infrastructure, making EVs more accessible and practical for the average consumer.
- Advancements in EV Technology: The pandemic did not slow down technological advancements in the EV sector. Manufacturers continued to innovate, improving battery life, reducing charging times, and increasing the range of EVs to make them competitive with traditional petrol and diesel vehicles.
- Changes in Consumer Behaviour: Economic uncertainty caused by the pandemic has made consumers more cost-conscious, leading them to consider the long-term savings associated with EVs. Lower maintenance costs and the increasing availability of affordable EV models have made them an attractive option for a broader demographic.
- Corporate Commitments to Sustainability: Many corporations have committed to reducing their carbon footprint, with some pledging to convert their fleets to electric or hybrid vehicles. This corporate shift is likely to have a ripple effect throughout the industry, increasing demand for EVs and further boosting the sector.
The pandemic acted as a driving force for change, bringing long-term environmental concerns to the service and increasing preferences for electric and hybrid vehicles. The trend towards EVs is still continuing to grow, contributing to the global effort to reduce carbon emissions and combat climate change.
If you’d like to read more about how electric vehicles are impacting the motor trade be sure to check out our article all about it here.
Digital Transformation
The pandemic served as a driving force for motor trade businesses to embrace digital tools, changing the way they manage inventory, communicate with customers, and market their services. Digital inventory management systems became essential, allowing businesses to track stock levels, order parts, and manage logistics with increased efficiency. These systems provided real-time data, enabling businesses to respond quickly to market demands and reduce wastage.
Customer communication also adapted to a more digital approach. With restrictions on in-person interactions, businesses used online platforms, such as social media and websites, to maintain and build customer relationships. Websites were optimised for user experience, incorporating live chat functions and virtual assistants to provide immediate assistance, even outside of operating hours. Social media channels offered a space for engagement, customer service, and community building.
The adoption of virtual showrooms and augmented reality (AR) allowed customers to explore vehicles and options without having to leave their homes, and e-commerce platforms enabled easy online transactions, from vehicle selection to financing and final purchase.
The digital transformation within the motor trade industry has not only been a response to the pandemic but also a strategic move towards a more resilient and customer-centric approach. By investing in digital tools for inventory management, customer communication, and marketing, motor trade businesses have positioned themselves to thrive in a post-pandemic world where digital is the new norm.
Key Takeaways
Reflecting on the pandemic’s impact on the UK motor trade, it’s evident that the industry has faced significant challenges. The way vehicles are sold had to be reimagined, there were shortages of parts, and businesses had to find innovative ways to stay afloat. However, there have been positive outcomes as well. The adoption of new technologies, the increase in electric car sales, and the continued demand for cars, including used ones, are all encouraging signs. Moving forward, the industry is now better equipped to handle future challenges with resilience and innovation. Although the journey was tough, the lessons learned have strengthened the industry, preparing it any future challenges.
