PTW industry lessons from 2020 and trends for 2021

What trends emerged in 2020?

Trend 1: A gradual uptake in digital

As the first lockdown of 2020 took hold, customers’ use of digital accelerated rapidly. With people stuck at home and eager to avoid dealerships and other public spaces, more and more moved online. Despite this, the majority of business we transact is still being completed physically with a dealer. It’s clear customers aren’t quite ready to go fully digital just yet. But that’s not to say digital doesn’t have a role to play – it’s going to become even more important as we move forward into 2021.

Trend 2: More resilience in the market than expected

Back in March, we could have expected a massive crash across the automotive market as the country – and much of the world – ground to a halt. However, the market stayed remarkably robust. The industry seems to have benefitted from a move away from public transport towards private, and the PTW sector in particular has seen better-than-expected sales across the market.

“[The market] has done well, it has performed well. It’s showing its appeal to customers at both ends of the market which is great to see.”

Trend 3: Industry collaboration in support of customers

The PTW industry proved the strength of our partnerships throughout the year, rallying together to support one another and our customers. Dealerships all over the country worked tirelessly to keep people feeling safe and cared for as the pandemic ravaged finances and health.

At Black Horse, we helped over 150,000 customers – just under a fifth of our total number – with forbearance. At the same time, we aided dealers with extended stocking.

Supporting dealers and customers has been the focus of our efforts throughout the year, and we were pleased to see so many other members of our industry with the same aims.

Trend 4: FCA regulations giving customer confidence a boost

The final key trend for 2020 was all thanks to new FCA regulations relating to Commission and Commission Disclosures. We believe the regulations are going to be great for the industry – they’ll develop customer confidence in the market and help people feel more secure in their transactions with us. That can only be a good thing for everyone.

“It will develop more confidence in the market, and will help customers transact with our products and feel happy and confident about doing so.”

What might we expect from 2021?

Prediction 1: Digital is going to become more and more important

While customers have still been keen to transact physically during 2020, digital is going to become even more of a priority going forwards. Previously, many dealerships have been able to keep the physical and digital customers journey separate – but that isn’t going to be the case going forward. You need one fully integrated journey, or you risk customers dropping out along the way.

“You have to have a technology heartbeat in your business that allows you to follow customers as they move through different channels with you. The dealer groups and the manufacturers that do that will win out.”

Prediction 2: Sadly, there’s more economic hardship to come

The new lockdown is obviously causing a lot of disruption, but it’s not exactly the same scenario as the first lockdown. Yes, dealerships and forecourts are closed. But servicing, remote sales, vehicle supply and all vital logistics remain open. And, as we saw during the November lockdown, dealers have done a great job of enhancing their digital propositions to service customers remotely. From the conversations I’ve had with dealers this year, there’s an appetite to trade through this and keep the PTW market moving.

Once the lockdown ends, we’re likely to feel the pandemic’s other effects throughout this year. Economic issues are largely being drowned out by the need to focus on containing and combating the disease at the moment, but the scale of public debt is going to be impossible to ignore. Unemployment and economic difficulties are inevitable. Hundreds of thousands of customers will be facing financial hardship this year, and as an industry we need to be there for them in the same way we were throughout 2020.

Prediction 3: The ‘agency model’ is going to keep developing

We’re expecting dealerships’ roles to move more towards acting as an ‘experience centre’ – in a broadly similar way to how Apple stores operate. Dealerships will focus on adding value through in-person interactions and technologies, expert sales consultations, test drives and vehicle handover. As online competitors entice customers away with doorstep delivery and instant sales, this is a key way groups and dealerships can continue to compete through 2021 and beyond.

What is Black Horse doing to support this vision for the future?

Above all else, we are vehicle finance experts who love what we do. We’ll continue to bring that passion to our business, with continued focus on relationships.

“My ambition for Black Horse is for us to remain a market leader that puts customer outcomes and our long-term relationships with dealers at the heart of what we do. Whatever changes come about, we’ll stay true to those things.”

We’re also going to be focusing on digital. We’re creating a multi-channel financing journey, so customers can move seamlessly from digital to the physical retailer and back to digital. Keeping technology at the forefront means we can improve the journey for both dealers and customers, and continue to support dealers as they evolve their own models.

Alongside this, we’ll be constantly reviewing our products. If we find somewhere they could be more flexible, we’ll make changes so we can continue to help customers as their needs evolve through 2021 and beyond.

“Technology will stay at the forefront, be it improving the journeys for customers, improving journeys for dealers, digitising where we can or supporting dealers as they evolve their model.”

If you’d like to explore more industry analysis from Black Horse, browse more articles.

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