China's automotive market is evolving rapidly, with new manufacturers, faster vehicle development and changing consumer expectations reshaping the industry. As Chinese brands expand across Europe, established manufacturers and retailers face growing pressure to adapt and compete. In this episode of Talk Auto, Holly and Jake are joined by Ian Plummer, Chief Customer Officer at AutoTrader, to explore his experiences of visiting China and what Europe can learn from its automotive market.
In this episode of Talk Auto, we discuss:
Guest:
Ian Plummer, Chief Customer Officer at Auto Trader
01:24 Holly Mottram
Welcome back to another episode of Talk Auto. I'm Holly and for those eagle-eyed viewers, you may notice we don't have Rich with us today, but I do have Jake who's been on the podcast a couple of times in the past. Jake, you're going to be joining me on this side of the conversation. How are you feeling? You ready for it?
01:39 Jake Roden
Yeah, thanks Holly. It's great to be back. You know, I enjoyed it so much on the other side I really was keen to kind of come back and see what the hosting side of things is like
01:47 Jake Roden
Well, we are very much looking forward to having you and also our fantastic guest today. So you can join us for a good episode. A familiar face in automotive. We are welcoming Ian Plummer, who is Chief Customer Officer at Auto Trader. And we're going to talk about his road in Auto Trader and also your learnings from your time spent in China. Thank you for being on the podcast today. How are you?
02:04 Ian Plummer
It's a pleasure. I'm great. Thank you. Looking forward to catching up.
02:07 Jake Roden
Yeah, me too, me too.
02:08 Jake Roden
Yeah, we're looking forward to it. So I think how we want to start before we kind of jump into the proper discussion, we want to get to know you like a little bit better. You've spent a lot of time in the automotive industry, worked in manufacturers, retail groups. I think what would be really interesting to start off with is understanding how some of that experience and those lessons you've taken into where you are today in your kind of current role.
02:32 Ian Plummer
I think what I've learned in the roles I've had, which luckily for me have spanned the entire sort of ecosystem of automotive, all the way from manufacturer head office internationally running around the world and so on to manufacturer national sales company, very different, to retailer sort of running a group or running a single site very local to all the way through to international with national in between, is that generally people don't understand each other very well. And that's generally because they haven't done the role of the other. And they judge based on stereotypes and don't really live out the words of partnership and trust and so on that are very often espoused but not so often really visible in the way people behave. So I think what I've taken from my learning so far is making sure that I don't fall into that trap. I'm lucky to have the understanding of the different roles that I've just mentioned. I deal with all those different sectors of the industry today. I'm very lucky to have the opportunity to have that variety of my role, which I find really fantastic.
03:26 Jake Roden
Fascinating and fantastic, but I always hold dear to myself and my journey, the fact that I have the understanding of those different sectors. Remember that and bring Auto Trader out to them and bring them back into Auto Trader basically.
03:38 Holly Mottram
I feel like we talk a lot on the podcast actually about how the industry needs to be more connected and actually for it to succeed and whether that's you know within roles individual roles or businesses as a whole We need that connectivity and to understand each other's point of view So really interesting that you that you bring that up now in 2017 you moved to Auto Trader What made you take that move and did anything surprise you when you when you started the role?
04:02 Ian Plummer
I left Volkswagen to join Auto Trader because I felt like I'd done a great stint at Volkswagen, enjoyed my time there and was ready for a new challenge. I particularly enjoyed at Volkswagen before that, running Nissan in retailer jobs and internationally and so on, all way across the mix. The angle of digital and how that could accelerate, change and reshape things favorably and allow businesses to work smarter, allow the consumer experience to be better. I'd done a load of great work with colleagues in Volkswagen.
04:29 Ian Plummer
Brand and within the Volkswagen network really shifted the dial in terms of how we operated there and what we called blended retailing at the time. Started that journey when I soon after I got there in 2012 really accelerated in 2014. Stimulated a little bit by Dieselgate a couple of years after that. So felt like it was time to move on, make more challenges ahead and more opportunity ahead. And the opportunity at Auto Trader was really about driving change in the industry. And we define our purpose at Auto Trader as being driving change together responsibly. So that implies that the...
05:00 Ian Plummer
The consumer experience in automotive could be smarter and better, more enjoyable for the consumer. It could be smarter, more efficient, more profitable for the retailer. And then if we can improve that user experience from both sides of the equation, we could probably make it a more valuable one for the industry. And if that does work, then it's a sustainably valuable one for Auto Trader. And that's why the together point is really vital. It's a partnership-based model that we have. And the last aspect of that, responsibly thing, is that it feels at Auto Trader that we try to do things
05:31 Ian Plummer
Very much in the right ways for the right reasons. And the community-minded value that we hold dear, the sustainability work that we do and so on, are just examples of how we try to make sure that we do things in the right way and live the purpose every day.
05:46 Holly Mottram
That's a fantastic response I have to say. Really, really nicely put there I think.
05:51 Jake Roden
I think that's kind of a nice thing, going back to your previous point as well, around you had experience in the different sectors, so it seems like your role now probably incorporates all of that really nicely because you deal with all of those different types of businesses today. So I think having that, like you said, experience from the other side of the table gives you that well-rounded view of being able to understand what it's like to have the discussion from the other side. I think obviously it's kind of a long career that has spanned that as well in those different sectors, so I think... I know, I was going to...
06:22 Holly Mottram
You trying to age me now?
06:24 Holly Mottram
Try and say it in a nice way of a well-versed career. I think what's, and you mentioned some of the digital changes in 2012 and that side where completely different world to where we are now. So how much of the industry changed and what's the biggest change you've seen since starting out in the industry as it is today?
06:40 Ian Plummer
I think there are two things that come to mind. To give you the age of Angle, I started my career at the back end of the 90s over in France, working for Renault head office. Did a lot of great jobs in different parts of the business, loads of different varieties of experiences and so on. Different countries, it was fantastic. Got into an e-business director role at the beginning of the 2000s that was right at the beginning of the of dot-com bubble that then shortly afterwards burst, but it was fantastic. Well, it lasted.
07:07 Ian Plummer
And it did signal a real period of change that we're still on right now and we're accelerating through AI as things happen today. But back in the late 90s, early 2000s, we didn't buy cars online. There weren't really websites back then. Auto Trader started selling websites back at the end of the 90s before many other players took that shift and moved, obviously as everyone knows, from magazines to a digital and a tech company kind of format as it is today. But that digital engagement with how we do things has accelerated massively and we don't think twice about
07:35 Ian Plummer
Searching for stuff online, engaging more and more in terms of the buying journey online, transacting online for a whole host of things. So that has fundamentally shifted the way that the automotive industry works. That digital change goes all the way through the way we design cars, the way we build them, the way they're software defined these days, the way that we update them over the air and so on, all the way through the buying experience. So the digital angle is probably the biggest one. But the second point I'd raise, come back to the connected angle, is it feels like the industry is now finally connecting better.
08:06 Ian Plummer
I don't mean to say that necessarily everyone understands each other across those retail or OEM kind of roles, it's still too many big gaps. But I think there is a greater awareness of the need to work in partnership. Too often I've seen companies, particularly OEMs, who've been very stuck in the idea of wanting to do everything themselves and wanting to control everything, being a little bit arrogant about how they went to market and so on. That seems to have faded and that's a really strong positive point in my opinion because of the interconnectivity. Of the industry is a strength if partnerships can really be leveraged to deliver on the opportunity. And you see that today in the way that many brands are developing their cars much quicker with things like the technology that's brought in from outside rather than trying to do it oneself. And I left one particular manufacturer when they started saying they were going to create the 13th brand and become brilliant at software. And I thought, I'm not sure I know any OEM that's ever been brilliant at just about any software project. I mean, I did one myself, a big one, and I'd like to think it went reasonably well.
09:04 Ian Plummer
But nonetheless, it's just not their thing. So trying to stick to what you're best at and bring in the competencies and the skills from whoever's best at the other things is a model which I think is beginning to work now better in automotive and which will, I think, stand the industry well.
09:19 Holly Mottram
Yeah, absolutely. I think, to your point there, Jake, actually, we've said it again on the podcast quite a lot, the only constant in automotive is change. I think that still rings true and will still ring true for quite a long time, actually. And so I guess now that we've kind of got to know you a little bit better, we're to move on to the industry discussion of today, which is going to be a quick fire round. Quite simply, just one question for you. What's something that the industry believes that you think is going to look different in reality?
09:48 Ian Plummer
I think everyone believes that AI will solve everything today. And I think it will solve a lot of things, but not immediately. And it won't be a plain sailing journey. So I think by that, I would say that I am definitely an AI believer and we use AI extensively across all the trade in three different ways from a consumer angle, from a retail and partner angle, as well as internally in terms of our operations, sort of efficiencies and so on.
10:14 Ian Plummer
As a tech company, we'd be daft not to be AI believers. We are fundamentally looking to accelerate a load of things we do as a business and really proactively drive that AI-driven agenda. But I think there's always a little bit of a risk that we, in any industry, automotive is no different, tend to think that the tech solution will be the panacea to every ill that we perceive. And I think it can solve a lot of problems, but it's really sometimes pointed towards a hype. A buzzword, a marketing slogan, rather than an actual problem or an actual opportunity to do things differently. And we layer things on top of an existing tech solution and the tech stack then doesn't join up. AI can help join things together if it's done really well. But if we just add in additional layers, we lose, well, we go further and further away from the joined upness that everybody talks about needing in automotive. So I think fundamentally that the thing I'd like to see everyone focus on more is
11:09 Ian Plummer
Looking at tech solutions, whatever they may be, or data solutions, or AI in particular, as a way to accelerate change and only a part of the change. In other words, if you bring in new tech solution, it's only the beginning of the journey, getting people to understand why you're asking to use it, how to use it, reshaping a business, maybe changing your processes is the only way to fundamentally leverage the value of that digital solution, whatever it may be. So there's just this big gap to answer your question between expectation of it being easy
11:39 Ian Plummer
And the opportunity. Is ripe of expectation, but it isn't easy and it's only something you can achieve if you really go it the right way.
11:47 Holly Mottram
I absolutely agree with that actually and I think the AI surge has 100% hit businesses but also consumers as well in how they search for vehicles, how they interact with businesses and yeah I think that connectivity point that we made earlier 100% even applies to that AI argument as well.
12:03 Ian Plummer
Completely. I mean, for example, we're evolving what we do. I mentioned the three angles of what we do in terms of how we use AI. And operationally, I won't go into detail, but there's lots of efficiency we can find in our team. When you, let's say you're doing a call with me and I'm an account manager and I debrief the call into my systems, basically I can immediately summarize the call back to you with an email that confirms everything we've discussed. I can link that into our CRM systems, maybe change the... The billing of something to be really, you want to buy something different, less of this, more of that, whatever it might be. I can put an internal Slack post out to tell the team what's gone on and celebrate maybe a success if it's gone well. The whole thing is so much easier. But then, more importantly, from a consumer angle, I think what's absolutely right in what you're saying is that there's a lot of opportunity to do things differently, but not everybody wants to do things in the same way. Exactly the same will come onto the retailer point of view. So we see a lot of consumers who clearly today already want to do a lot of initial search using AI.
13:09 Ian Plummer
We plug a question into Gemini or Claude or whatever. That's more of a sort of broad early upper funnel type of question than anything else. And many of us use that. A lot of people use AI in more sort of fundamentally deeper integrated ways that go further into a better analysis of lots of content. Then there are others that don't use AI at all. Stick with traditional journeys.
13:30 Ian Plummer
And my point being, same with when you're looking at the jobs to be done when you're actually buying a car and when the retailer engages with them. Some consumers want to do the physical journey end to end. That's less than 1% these days, tiny amount, but some still do. Most people want to do most of the car buying jobs to be done digitally. They all want to do them in different orders. The point of all this being that whether I want to search with an AI conversational journey, which we've now enabled on Auto Trader or with categories that we've enabled instead of the traditional make model, I can enable all of those things.
14:05 Ian Plummer
And if I'm a retailer wanting to engage with a consumer in these different ways, I can. If a consumer wants to do a part exchange online and do evaluation of the, get a finance calculation done online, actually apply online, they can. If they don't want to, they don't have to. If I want to reserve online, they can. And this is multiple routes to market that enable us to do things in the way that we're comfortable. And what we try to do is enable a consumer as well as a retailer to engage in the way that suits them rather than having a one size fits all type approach, which I think is a fundamentally preferable
14:34 Ian Plummer
Way to work for us all and for a consumer, it's got to be more suitable because we're not being forced down a certain route that doesn't feel natural to us.
14:42 Jake Roden
Exactly. And I think that's, so that's the exact thing we're seeing as well. You know, when we're talking to lenders or OEMs in our retail business, and we're saying, look, have the full journey available, less than 1% is going to go through it, but that's fine because someone might go 60%, someone might go 40, and you're giving them that option then. I think you were talking about digital and how it's caught up in the automotive space. And it's, I think that's to do with consumer expectations and the AI bubble, I guess, has boosted that with, they expect more from when they buy a house, when they buy goods and services, whatever it might be. So they expect more from the automotive journey. And that's kind of,
15:14 Ian Plummer
Pushed us all along really to try and improve ourselves. So I think that that moves in quite nicely to kind of the main topic and subject of today, which is kind of what's going on in China and the technologies and retail expansion. I know you spent quite a bit of time over there as well. So I'd be really keen to get your thoughts on that. And I think you said a quote to our team before we started when we were doing the briefing around what goes on in China doesn't stay in China. And I think that's stuck quite a lot with the team when we were looking at.
15:42 Jake Roden
The topics for this episode and how we can explore that subject. Think what exactly do mean by that statement in terms of the UK and in the European markets from the time you spent?
15:51 Ian Plummer
It was a heading of a presentation we did with some colleagues on the way back from China to explain to people internally as well as on forums, webinars and so on that we do why we should give a damn about what's happening so many million miles away. Fundamentally, it is my belief that the Chinese automotive market is way ahead of the rest of the world nowadays. It is considerably bigger. The Chinese produce more cars than... The EU plus UK, so wider Europe and US combined. It's further ahead in terms of the direction of travel and the speed at which it's going. So it's already got a gap of a certain lead, I mean leapfrog the rest of the world in terms of technology a while ago and that becoming evident after the pandemic, but it's actually still going faster. Others catching up, but not yet going at the same speed. So there's a lot of learning to take into that. If they're basically producing about 35 million cars, but have a...
16:41 Ian Plummer
Domestic sales are around 27 million right now. That's a lot of cars that can be exported. They're now exporting roughly a million cars a month, around 10–11 million so far this year and continue to grow at pace. They used to be in 2021, they were the fourth biggest exporter. They're now by a country mile the biggest, twice as big than Japan. So therefore a lot of cars are coming to us. So when you think of the so what, well first of all, a lot of their cars are coming to the UK and Europe.
17:10 Ian Plummer
Last month in Q3, they accounted for more than 22% of the market. So the so what of what goes on in China is well, the cars that they're building and making over there for that market is moving fast are coming over here and they will affect the retailers and the consumers and so on and the OEMs and the funders, the whole ecosystem over here. But because they're so influential in terms of the type of car they're building, I think there's a lot of things to learn as well about whether it be the electrification journey. We've seen PHEVs rise massively, not just BEVs. We'll talk about cheap Chinese EVs, they're neither cheap.
17:42 Ian Plummer
Nor just electric, they're good value, but they're full of different fuel types. People talk about the technology in them, that's fundamentally driving the way that things are moving, I think, in terms of the way that consumers will engage with their car, whether it be the ADAS functionality, the AI in the car, the smartification generally of the appearance of car, the amount of screens you're gonna be using. So all of these factors are flowing through, if you like, into the way we use our cars and the way that we'll be, I think, competing against China. And if you just take one last factor.
18:12 Ian Plummer
If you consider that the established brands, we call them legacy brands sometimes, think established is a better word, are massively suffering at the moment from the impact of the Chinese brands in two different ways. Fundamentally, they used to be making many of the big German groups around half their profits over in China. That number is massively down now. The likes of Volkswagen put out about their third profit warning a couple of weeks ago down to 1% operating margin. So 1% for Volkswagen Group is unheard of. They're seeing that hit over in China where
18:38 Ian Plummer
The established brands that we, as we call them over here, the Western brands that they call them over there, used to weigh back in 2020 around two-thirds of the market, than that. Now they weigh less than a third and they're continuing to decline. In the electric side of the market, electric and hybrid, they're tiny. They're nowhere to be seen in the top 10 brands. So they're losing over there on the one side. And over here, they're facing that huge challenge of seeing those products come into the European market. They've got the US market, most of them that are struggling in, unless you're Ford or GM and so on, because the tariffs are protecting over there.
19:09 Ian Plummer
So those brands and the retailers of those brands need to see what's going on in China, to go back to your question, in order to see the so what, which is you have to react. If you don't, you'll be like a frog in boiling water. It will happen to you. If you think it's not a real concern that these brands are eating away at your share, eating away at your profitability on a global level, you will end up suffering, I think, a worse fate than just seeing a couple of percentage points decline in your market share.
19:34 Ian Plummer
Yeah, completely. Think from that, everything you've seen, I guess, in the market, roughly how long do you think it is from something happening in the Chinese market before it reaches the Western market? So things you've saw over there, what's the timelines around, like how far are we behind in the Western market, behind what the Chinese
19:49 Ian Plummer
Yeah, in these days there's different ways of answering that. First, they've got a feedback loop in the Chinese system, which is so much quicker. If you speak to a UK retailer these days, they will often say things like, I had the boss of a brand come to see me the other day, or we had a call with them and they gave us feedback on the car. Why was that? Because they asked. Great, they asked. And you think, well, it's just blindingly obvious, but having worked in brands before, was established brands myself, been a retailer, as a brand.
20:16 Ian Plummer
I would never have expected a retailer CEO whatever to have said to me or by the way, there's a problem on this product Could you do something about it because I just know instinctively that they would know instinctively It's probably not worth bothering because even if they might like me might think I'm be a decent guy and raise that question back in head office I'm probably not gonna get an answer probably for falling some sort of feedback loop that will be about a two-year process and it'll come back with a no you misunderstood you're wrong and the feedback was Incorrect and here's why we're right for people don't bother but the Chinese work so quickly on that feedback loop that within weeks they'll have taken on board a bit of feedback and changed the software or whatever, the setup of the car to accommodate it or change the software that they have to communicate with the retailers whether it be the car or the way of working around the car. So that's just one crazy example. The speed at which they develop cars, the China speed logic is huge as well. Mean, they're typically developing cars in like 18 months. Two years is almost slow these days, five to seven years historically and the established brands, many established brands I should say now.
21:18 Ian Plummer
We had a great meeting with Renault CEO last week. They're a great example of brands that have learned that method. So it likes a Volvo BMW software-defined vehicle focused brands that are really taking the Chinese example and learning from it just in the same way that the Chinese used to learn from the established brands that could join ventures over there. So the speed angle is visible in so many different ways. But I'd say just one last example is that the Chinese brands over here have learned our way of selling cars, which is different to theirs. And they've adapted to things like the used car model, isn't relevant in the Chinese distribution cycle, the use of finance, which doesn't really happen at the point of sale level in China. And they know that those are massively important over here. They drive the fleet market just half our volume. So they've got on board with it.
22:01 Ian Plummer
Yeah, it's interesting that you mentioned the speed aspect with new entry and OEMs. We had Nick Thomas from Changan on quite a while ago now, probably almost a year ago. We've been doing this podcast for a while now. He was telling us about an experience that he'd had when they brought Changan to the UK or European roads and they fed back immediately that it works well in China, but actually the driving style here is different, how wide the roads are, how...
22:24 Holly Mottram
Know, country roads, etc. And I think they said within weeks, maybe two weeks, they'd put the software implementation into their vehicle and it drove fantastically. I think he said he got into it and it was, my days, wasn't good to drive. And then they got the software patch fed back within weeks and then it was a fantastic car to drive. I think that's a real testament to that, the speed at which those businesses develop for the European market.
22:48 Ian Plummer
A great believer in the benefits of learning somebody else's culture, whether it be from a personal point of view. I've got, I think, a pretty multifaceted culture myself from different parts of the world and so on. And I believe in the value of taking the good bits of everybody's culture. And in a business context, it's exactly the same. You see another business, not just the whole country, but another business doing something really well, learn from it. And I think that's what the Chinese have done. But equally to the credit of the established brands. That's what they're now also doing, most of them very quickly and very well. It's, all of that is good for the industry. It's good for the consumer. They get a chance to get more and more cars to choose from, better and better cars, more and more electrifications, good for the, for the planet, good for the government's agenda and so on. It's good for the retailers that got more brands and partners to choose from. So the journey is positive, I think, all around. It's challenging if you're an established OEM because you've got people forcing you to change at a pace you might not be comfortable with.
23:49 Ian Plummer
Ultimately, if you do learn the right lessons and do change quicker than some of the others, you'll stand out equally as a winner too.
23:56 Jake Roden
Yeah, absolutely. Now, you mentioned that the secondhand market in Europe and the UK not being kind of the same as China. So if cars and technology are changing faster now with these new entry in OEMs, what does that mean for the used market, for values and for dealers' confidence in stocking older cars?
24:12 Ian Plummer
Lots of points to unpack in that firstly, all the cars as they are today, 10 to 15 year categories for example, they're selling particularly well. That 10 to 15 year category does loop the 2016, 2017 new car market, which is particularly strong, 2.6 to 7 million cars. So there's lots of them, because if the new car market was strong by then, that means that 10 years down the road, there were also cars on road. But that 10 to 15 year category is still performing extremely well. The supply and demand balance is very favorable to demand. In other words, pricing is strong.
24:41 Ian Plummer
Turn of speed of those those those cars is really good So there's no lack of interest in those cars If you come down a little chunk in terms of ages the five to seven year category is right now where you see the impact of those fallow years we had of 2020 21 and 22 where the new car market was only 1.6 million cars So as that category of cars is now aged five to seven year sort of vehicles are lower in supply Is that a problem? Well right now not particularly because the there's enough of them out there just now to
25:11 Ian Plummer
Satisfy the demand for them, prices are still holding pretty well too. And the retailers needing a few more of those cars are going either up into older cars, stimulating further demand and then holding prices for those, or coming down into lower cars to find a bit more supply in the slightly bigger new car numbers we've seen in more recent years. So fundamentally, it does depend on the pockets of age you're looking at over the current period. If you look further out, older cars still represent huge value for people. If you can only afford a 10,000 pounds or so, or under used car, you fundamentally are looking at a different kind of product than the stuff we're talking about coming from China today. And that will still be a large, large part of the used car market. As things flow through, things like over the air updates and so on will make cars more more relevant for longer and longer. And you will end up maybe at a point where your seats wear out quicker than your battery or today your engine, especially if you're riding an Uber or something like this, seats will wear out quite quickly in that situation.
26:07 Ian Plummer
But I think you'll find that the cars will, the older vehicles of tomorrow, having answered your question about the older vehicles today doing really well, the older vehicles of tomorrow I think will fare pretty well. The values will remain pretty strong. And if you look at today how things have balanced out with diesel, now equating for less than 4% of new car sales last month, back in 2015, 16, diesel was half of the market. What's happened is we've produced less of them, they've been put into the new car market at lower numbers. The demand has...
26:35 Ian Plummer
Sort of dwindled because of diesel gain and the fact that since electrification and with less supply coming to the market that has created less of a bottleneck let's say or an excess of supply there's still good demand for diesel less of it than there was and it roughly equates quite naturally actually to the supply that's out there so I think that's going to the same for cars generally and what we see in the Chinese sector more specifically is that their cars are turning very well the speed of turn of the Chinese used vehicles is very strong it's higher than the rest of the market
27:04 Ian Plummer
Was quicker than the rest of the market.
27:06 Ian Plummer
I think what I'd be interested in as well talking about the Chinese segment of it is we know that some of these brands today offer how many models? Two years time, it be that they don't offer any of those models and they offer completely a new model range. Or unfortunately, there's been manufacturers who've exited the market. How do you see that used market of a model that either existed two years ago and doesn't today or probably even to a more degree of a brand that existed two years ago but doesn't exist today? How would that use Carfair? What's your opinion or...
27:35 Ian Plummer
Anything you've seen at MG. We've had a couple of brands that have exited already, not just in the Chinese market, but I guess there's been a couple of other brands. A few different examples. Model S Tesla. I had a Model S on order for about 18 months when this facelifted version was due out about four years ago. After a while I got a
27:53 Ian Plummer
An email along with everybody else had put an order in and left a deposit saying, ever so sorry, we're not actually building Model S in right-hand drive anymore. You can have a left-hand drive with one, or we'll give you a discount towards the Model 3 or Model Y if you want one of those. I know the boss of Tesla, UK, well, gave them a call and said, this is a joke. And it wasn't, but okay, I understood why they'd done it and Tesla back on track doing really well. Saw again that in news just today even. Number one and two models in some of the European sales, the three and the Y. So they cancelled the S.
28:23 Ian Plummer
Yes, it's still in the market. Know, the ones that were sold back in the earlier phase of Tesla's growth. Those cars are still selling very well. I've got a colleague who's got one of the initial models. He loves it, swears by it. It's still a very high performing used car model. It's got a very good speed of turn. The fact that you can't buy another one today and you'd have to go and buy a different model from Tesla is no different to, let's say, Jaecoo deciding that it won't happen. But let's say the Jaecoo J7, one of the stars in the market at the moment, is no longer in their plans and they want to...
28:52 Ian Plummer
Cancel that and bring out Jaecoo J7 and a half, whatever model it may be. But you see what I mean? I don't think that will be a problem as long as supply and demand are balanced. And if there are still people today buying Tesla Model S cars because they like that car, and there are still people buying Jaecoo J7s in the future, even though that model has been replaced by a totally different one, I don't think that's an issue per se. That notion of cars being replaced by other models, something that's happened in the industry over the last decades, it's just that it took a lot longer.
29:20 Ian Plummer
It took five, seven minimum years, maybe 10. Some cars like Fiesta and Golf stayed around for 50 years and still are around. Golf is still doing really well. It's coming back in ID. Golf, which is fantastic. Positive news for the Volkswagen world. It returns sort of a nameplate that really means something. But if Volkswagen launched another car, like let's take an EOS. Remember an EOS? A Jetta. There were some cars that Volkswagen had that weren't great that aren't there anymore. Does it matter? No. There's still some Jettas on auto-trading to buy that are maybe, I don't know, 10 years old. Yeah, there are.
29:46 Ian Plummer
They're still working well, of course they are. They're really valid for certain people. So I think that journey will just be accelerated and what's really strong is that the Chinese approach to speed is very different to some of the established brands. And if a model doesn't work, rather than in our historic way of working, my way of working in the past would have been, crikey, that model's not launched very well, demand's a bit soft, crikey, it's gonna be a long time until the facelift comes along, we're gonna have to put the offer up a little bit next quarter and up a bit more next quarter, it's gonna cost a bit. We'll push it into fleet, gotta keep it going for a while.
30:18 Ian Plummer
Going to be a shift this one. Rather than that they'll just say let's just can it. A lot of their suppliers are often internal so they can turn around to people instead of having five ten year commitments on a certain widget they don't need that widget anymore use this one or they've got standardized widgets they can simplify a stupid example and widgets per se but as a principle. I think the speed at which they can do things is something we can learn from and will just be the same kind of method we've had in the past but an exponentially quicker level.
30:49 Jake Roden
So do you then think, because you've used some examples there, that it's less so about the models being replaced and more so about the consumer trust in the brand? Because I think your examples there at Volkswagen, obviously it's a very well-known brand. I think it's a very well-trusted brand. And from a consumer perspective, and to be fair, a retailer perspective, you know that you're almost betting on that OEM, you? You're almost betting on that manufacturer. Okay, that one's flopped, but it's fine because... We know that we trust them. Do you think, firstly, that's the case? And secondly, if the Chinese new entrant OEMs might struggle with that because they've not had that established presence in the UK and European markets?
31:25 Ian Plummer
Again, lots of things come back in that I think you're totally right that consumers need to trust the person or the entity they're buying the car from. That could be the retailer as much as the brand. Chinese manufacturers have been savvy in as much as realizing that the days of the DTC and agency side of things, well, that's moved on, that debate. And they, in parallel to that, realized that they would gain in terms of reassurance in the minds of the consumer if they not only did things like the Korean playbook of the past by doing long warranties, which they have done. But also I had lots of local retailer partners, the consumer in Leeds where we are right now, recognized. It might be the Lookers or the Listers or the Lithia site. Three Ls in that little trio, but they know that Lookers or that Lithia site. They've seen it there before. It had that brand and that one. Now it's got this other one as well. Great, I know I can get that vehicle serviced if I buy the brand X that's just been launched. I think also some of the established brands in the Western world tend to...
32:26 Ian Plummer
Overplay the history point two examples. You took the case of Changan and Nick He'll tell you that that brand has got a hundred years of history It just might not be the same hundred years. We used to mean say we should dismiss it That's a bit bit of an almost neo-colonial view on the world just over there that's happened not over here Doesn't dismiss mission dismisses being less relevant But fundamentally, think the main answer to your question would be that the consumer doesn't in our opinion from the research We've done Auto Trader have and the data we see in terms of how people behave on our platform
32:56 Ian Plummer
Day to day, leaving their digital footprint 40,000 times every minute of every day and every night, they don't really care so much about brand anymore. Take another example, when I was at Volkswagen, pre-Dieselgate, we had three key adjectives, as any brand does, that we focused on as being the ones we wanted to be best at in every market. One was trust, and we were usually number one and number two in most markets. We were in the UK, and like Toyota were up there as well, it a trusted brand. With Dieselgate, we dropped to like last, out of the 40 plus brands that were in the market at the time.
33:27 Ian Plummer
We then in the year post the of Dieselgate issue sort of kicking off, had the best sales the other brand has ever had before since, based principally on loyalty. What did we ask people? Did we ask them to buy another Volkswagen because they love Volkswagen? No, we said to them, do you like your car? First of all, said, do you trust Volkswagen right now? Well, I know, they've done some bad things. Do you know what they've done? I'm not really sure, but I don't really care because it very bad. Well, they didn't really dig into understanding the issues and the issues were, in my opinion, massively overblown.
33:57 Ian Plummer
Very much US specific. But anyway, when you then ask people, would you like your car? Yeah, it's great. Which one have you got? Golf. You really enjoy it? Yeah, fantastic. I've two or three. Okay, do you want another one? Maybe. And we give you a discount, loyalty bonus of a thousand pounds on your golf on top of the existing consumer offer. You buy another one. Two right. So people went product first. And that's my point. Today, we are definitely much more product first. Brand heritage, in all of the research we've done, origin of brand, country of origin.
34:25 Ian Plummer
Those factors are much, much less important these days. And with the plethora of great products that are out there, brand loyalty is, I think, almost a thing of the past. Brand is a good secondary reassurance factor, but it's definitely not in the data we see in the top five criteria for why people choose a given model. It's nice to have a reassurance, and it definitely has value, but it isn't the determining factor. You can see that when you've got a...
34:48 Ian Plummer
Jaecoo J7, take my example earlier, and many other great products that come into the market since, they're doing really well. As well as, thinking the example of Volkswagen's ID. Golf, coming back to that heritage name gives them something they can play on, a product that people love, like my example a minute ago. But it reverses the sort of confusion that that brand created by calling the new version something ID.3, ID.4, et cetera, something totally different to the stuff that we were used to.
35:10 Jake Roden
Sorry.
35:10 Ian Plummer
You can play to that positively or you can throw it up in the air and accept that you're taking a big risk. Unfortunately, they took the risk, it didn't work and now fortunately they're backtracking on it.
35:20 Jake Roden
Yeah, I think you've got that blend of trust and people know brands, you know, I've always had this brand and my family's always had this brand, all that dealership's always been there that I've kind of dealt with. But then obviously from a UK point of view, and you mentioned it earlier around our buying journeys are different to China and finance penetration is hugely high, especially in the new car market, it's insanely high. And we did some in our code reverse business, we did a consumer report in the UK and Europe around consumer buying trends with finance. And the majority of the time it was all monthly payment affordability.
35:49 Ian Plummer
The headline offers brilliant, the rates great, how much this is going to cost, but how much is this going to cost me in my pocket each month? And I think now that's what we're seeing a lot of is the product you can get from the Chinese market from a monthly payment point of view. That's where the Western brands are trying now to obviously meet demand on how they can combat that affordability aspect and deliver the same quality of products. They have got the brand loyalty to rely on, like said, if that's becoming less and less of a factor, I guess that's another thing that they've got to try and balance of how they can win market share back.
36:20 Ian Plummer
Yeah, completely. We see that in terms of how people behave on our platform all the time, switching between new and used, multiple brands, multiple products. Typically, we're looking at it like 18 brands in a search that lasts around three months, 88 days, I think is the actual number. And we're talking about 655 minutes of search. So a lot of time spent looking at lot of different models. People will often compare new and used, and they'll generally have a finance amount or a total amount of money idea of what they need to spend in their mind. And they don't...
36:50 Ian Plummer
Do what the industry thinks they do, which is wake up in the morning and say, hey, darling, let's go and buy a new big segment SUV. That is like a segmentation of the world that is purely inward looking. It goes back to my first question about the industry. I think it is vastly inward looking and gradually forced by lots of changes that we've touched on, needing to sort of expand its horizon and look outside, lift its head, look further out.
37:13 Ian Plummer
And that's a positive because the way that the consumer will think is much more, I've got 300 pounds a month to spend, what can I get for that amount of money? And that could be a premium German product of three years of age used vehicle. And it could be a brand new, Chinese could be established brand as well, new electric product for 300 pounds because it's got a consumer offer from the brand, it's got subsidized finance from the finance house. So it actually stacks up really well. There's a little bit of a shift in recent times we've seen from used cars into new. Because of this increasing attractiveness of the new car market, which is increasingly competitive, pushed by the arrival of so many brands, have 75 or so in the UK right now, 45 pre-pandemic. So there's more people looking to take a slice of the pie and the pie is still, well, hopefully 2.2 million plus this year, but 2.3 million before the pandemic. So it's no bigger. It might be a little bit similar in terms of the size. A lot more people looking to take a slice. That means more competitive, good for the consumer, almost monthly payments are what's driving the journey upwards.
38:14 Jake Roden
Yeah, interesting. Now, switching is just a little bit to talk about the retail side of things. Now, I know you went to Paris most show, didn't you? Was it last week? Firstly, how did you find it?
38:24 Ian Plummer
Really good, really good to see as much as brands will sort of moan at the fact they've got to do these shows again because it cost them a lot of money and it's not a cheap thing or an easy thing to do. I think from an industry perspective it's good to get a sort of lay of the land and see what's going on with like Renault stand, I mentioned Renault a minute ago, they had a great stand there, they had six world premiere launches so they made a big thing of it. Stellantis had some great products, a 2CV concept that was on show, so a lot of great work from the established brands. They had to fight back. They've realised that if they don't go to these sort of places, Goodwood in the UK is good example recently, it's become more more dominated by some Chinese brands that have ceased to, well, they need to do the brand marketing awareness building stuff that drives a new brand that's purely conquest focused, that's got no renewal opportunity, because well, I got any cars that they've sold in past to renew. So if they're there and you're not, you're taking a big risk, you're leaving your back door wide open. So it's good to see the established brands are now looking to sort of put themselves in front of consumers and put their front foot forward.
39:26 Ian Plummer
But equally, 40% of the stands and the products actually on display were from Chinese brands. So there were lots of the ones we know already, lots of additional ones that we don't yet have in Europe or the UK. So when I said a minute ago, we have 75 or so brands present in the UK based on what I've seen of being in China, at motor shows over there and the last various events in the last couple of years, plus speaking to people in Paris, we'll get to plus 90 odd unless we lose a load by the end of the decade at the latest, probably earlier than that.
39:55 Ian Plummer
So that level of competition is only increasing. So it's great to see, basically to your question, a load of great new products, whether it be a 2CV, or whether it be a Leapmotor, or a Xiaomi, for example. These brands are coming with some exciting products from both sides of the spectrum.
40:08 Ian Plummer
Yeah, you've said exactly what—so, we had a couple of colleagues go from my team, and they came back and they said it felt—I mean, you said 40 percent there, but they said it felt like the new entry in OEMs were dominating the show, and with names that they'd never heard of, just like some of the ones that you just said have not entered the European or U.K. Market. I think it would be interesting to get your approach from the point of how do you the approaches to selling cars in China differ than what we're used to in the U.K. And Europe?
40:36 Holly Mottram
So for example, the Paris Motor Show, I was quite surprised actually to learn that it's, I think 66% of people that go are actually looking, actively looking for their next car, a brand that they might trust, a new brand. And that's kind of the approach to selling cars for that sector. What do you think, how do you think that differs from China?
40:55 Ian Plummer
The number of people going to shows to actually look at cars to potentially buy them varies by country. There's some great examples. Belgium has a show in Brussels in January that accounts for more than a third of the annual sales of the country. So there are certain exhibitions that are very consumer focused, others that are more industry focused. Geneva used to be, when it was in place, it died a death post-COVID, used to be much more of an industry focused thing, really great show to get around, early part of the year, lots of big launches and so on.
41:25 Ian Plummer
The Paris one, pretty good from a consumer point of view, but lots of industry as well. So there's a combination. In China, equally there's both. The shows over there, the motor shows are massive. There are so many people there. When you go to the VIP days, it makes it really sort of prestigious, hardly anybody there, and you're walking around with some sort of golf cart to drop you off at different shows. It's not that you do... It's not that you burn a bunch of steps and shoe leather getting around...
41:53 Jake Roden
Sounds ideal.
41:53 Ian Plummer
A ton of halls and millions of square meters of floor space of cars. But it is full of people, full of people. Those are the press days where there are hundreds of influencers on every stand. And then in the public days, I've seen images, they've not been there, there are queues to go on certain stands and they have to have cordoned off sort of queued massive methods to sort of manage the flow of people. So people do want to go and see the product. And I think this is...
42:19 Ian Plummer
Exciting thing. It's great that the car industry generates this interest. But fundamentally, to go back to the core of your real question, does it differ? Yes, very differently. People go to market in China with a new car focus only. The retailers are generally only really focused on new car. Some of the established brands have a good focus nonetheless on after sales where they make some good returns. They don't really do used cars. Used cars are not really seen as a noble part of the industry.
42:43 Ian Plummer
They're sold by different people in different ways, usually in the smaller cities and so on. And people will generally keep a car of themselves and give it to the relative rather than put it into a used car arena. In the UK, our used car market is four times bigger, eight million cars compared to two or so million new cars. In China, it's the other way around. The used car market is considerably smaller than the new car market. So that just creates a different balance. What's tricky in China at the moment is that the new car market has become so competitive, the pricing has been so...
43:14 Ian Plummer
Driven down by so many brands fighting for share, that the profitability of brands has been suffering, but so has that of retailers. And there is probably a bit of a reduction of numbers of points happening in the market. But retailers are going to have, I think, China, are going to have to focus on other profit streams. New cars used to be enough when the market was growing so fast, and there was enough money in each car. Now that it's not growing so fast, and there's less money in each car,
43:39 Ian Plummer
Like in any business, need to look at the other revenue streams. Used cars will probably have to be one of them. Finance will probably have to be another one. And after sales is definitely going to need to be one. So there's things that they are going to need to learn from the more mature European Western markets.
43:56 Jake Roden
Can be interesting as well to understand and this probably comes more so from you being in China having the conversations with the with the leaders of these brands of kind of what's their opinion of the UK market in terms of we're a frustrating market right we drive on the different side of the road I won't say wrong or right but we drive on the opposite side of the road to the majority of Europe we're a bit different market like said in finance so I imagine the margins because we're so much a price sensitive market as well I imagine the margins are a bit
44:24 Holly Mottram
Tighter when you're dealing with a market that you're building a car, you can build it for Europe. A lot of OEMs are setting up shop in Germany and kind of running operations centrally out of Germany and a lot are doing now certified pre-earings schemes and stuff like that. So how does that, what kind of, what's the opinion do you think of the UK market?
44:41 Ian Plummer
The UK market is the second biggest in Europe. They would obviously think, well, you think big five when you look at the European markets. Obviously, you've got Germany, UK, France, Italy, Spain. So you're the second biggest. Clearly, if you're looking at Europe from a distance, you think, I've got to go there. The Chinese do sometimes fall foul of a similar sort of trap that the Americans fall into, which is thinking Europe is one place. Just like America is full of different states that work differently, have different tax laws and buying and selling cars and so on. And China is a massive place that's even bigger. And it's not one.
45:11 Ian Plummer
One sort of way of working, but it is at least a uniform sort of tax regime. Clearly, each country in Europe is rather different. And parts of the UK are different from one to another, et cetera. And we're proud of those differences. They, like any actor coming from afar, will struggle slightly to get their head around that. But typically, they will see the UK as a key market, not be overly phased by the right-hand-drive side of things.
45:32 Ian Plummer
Right-hand drive adaptations are less costly than they used to be. The way that cars are designed these days, software defined angle of things, you don't need the same drive shaft if you drive by wire and brake by wire kind of functionality and so on. So that's less of a cumbersome problem than it used to be. The investment sort of entry ticket is lower priced. But then if you think about where Chinese brands are developing outside of the UK, places like Brazil are doing really well for them. Russia, they sell lots of petrol cars. They're selling a lot into Australia.
45:59 Ian Plummer
Brands account for more than 30 % of the Australian market are very open as well. They drive on the right hand side. Southeast Asia, places like Thailand, they're building cars over there and selling a lot over there, drive similarly, often on right hand side. So there are other markets where they can swallow some of that investment cost. So that right-hand drive bit, I don't think is big issue. Then other things like openness of mind. We share data with our brand partners of any ilk very regularly.
46:22 Ian Plummer
And the openness of mind of the UK consumer is a big plus factor. If you're a new brand, if you're going to Germany or to France, you're up against a market where the top three brands are German or French. They account for nearly half the market. In the UK, the top three brands are certainly not British. We don't really have any fully British brands. JLR is what we think is British, it's Indian owned. Consumer might perceive it to be British. But equally, the top 10 brands in the UK don't even themselves account for half the market. And that number is down from around more than two-thirds. So we are a very split open market.
46:52 Ian Plummer
That openness is a plus point. The other factor I'll just say is obviously the language isn't easy for a Chinese speaker. I don't speak great Chinese. My daughter who does when I go to China, my interpreter, she's fantastic. Very proud of her ability to connect me with Chinese folks over there. But the English language is probably easier for them nonetheless than French and German. And fundamentally, I do believe really in my politics on this one, my conversations with many of these people, and it's pretty blindingly obvious, I think, if we hadn't been outside of the EU.
47:18 Ian Plummer
Right now, we'd be seeing all these Chinese brands investing in the UK a lot, not all the time, because some places are cheaper due to the labor and energy costs and so on, Slovakia or Spain and so on are advantageous. We'd be seeing a lot of them investing in plants over here, just like the Japanese did in the 90s. Toyota, Honda, Nissan. Those are the brands we're still talking about over here now. We might lose one two of them. It would be great to have bit more production. And you never know, we might see some of that happen if we're not too slow at changing some of that.
47:46 Ian Plummer
I've seen some of the news articles that some of the Chinese brands are actually looking at European plants. Even last week, this week have opened in production over here as well. The UK? Yes, both, yeah.
47:56 Ian Plummer
I as well as Europe. I mean, Nissan are shaving off a of the sundown plant for Chery. I think JLR has had similar discussions with various people, perhaps including even Chery, they've a partnership with in China, of course. That's the existing plant capacity that we could better use rather than leave idle. Expanding on that and getting back to the 2 million or so cars that we used to produce in this country just before Brexit would be fantastic. Right now, today, we're at less than 800,000. And struggling to grow up from that level. Who knows? But the Chinese, to answer your question, I think they see the UK as a good partner, an open partner. We don't have tariffs in place. That's a massive plus as well. And a consumer that's ready to buy their product. So not much not to like.
48:41 Holly Mottram
Definitely.
48:41 Holly Mottram
Now, Auto Trader's own data has suggested that UK gains so far are concentrated with just a few key brands who've invested quite seriously in dealer networks, product and visibility. What are those brands done differently to ones that are less visible in our market?
48:55 Ian Plummer
Firstly, think the brands that bit smaller are often just in the category of having started a bit later. So haven't yet got to the same level of maturity, but given the speed points we've talked about often, I I think that'll change. So the keys to success of those who've done very well are probably two or three simple points. So the first point is around awareness. The second is around having a range of products. If you come in with just one product for a long period of time, it's quite hard to gain any critical mass either in the mind of a consumer. Or in the mind of a retailer. You might be parked in a corner of a showroom where you've taken a little bit of space, but you don't really weigh very heavily in the day-to-day thinking, let alone business, the results of a given retailer. So it's hard to really take off. Unless that product is an absolute star in the market, it's very difficult. Equally having a range of choices from fuel types makes a difference. If you've created a bit of a brand awareness angle, you've got great retailer partners giving reassurance and so on. You've done all the basics. You've got your after sales in place, some the hygiene factors. Then you've got a...
49:58 Ian Plummer
Like I mentioned, a range of products and different fuel types. You can then walk people up or down the range from small, medium to large, in and out of fuel types, and you've got a critical mass in the mind of a retailer and in their business, and you start creating a flywheel effect. Retailers have seen with some of the brands that have taken off, crikey, this is actually really good, I'm getting some great traction here, I'll get some more, and all of a sudden it's taking off and they're growing further, and then social proof happens and the consumer sees the same thing. I see a BYD this or a Chery that on the road.
50:28 Ian Plummer
I tell my friend I've got a new car. They say, what have you got? I've got a Changann this or a XPeng that. And then it just builds. And I think that is the kind of positive flywheel that they've seen some of these brands. And the others that are coming a bit later down the road will likely learn those lessons because we've touched on it a few times. They're pretty good at it.
50:47 Holly Mottram
Yeah.
50:48 Holly Mottram
I think that's the interesting part about you talk about seeing what the OEMs can do and that physical footprint is really important to try and build that. My local town in Canock, we've got a Omoda and Jaecoo dealership, six months later, feels like every two cars on the road is in a Moda or a JK. So that's kind of that familiarity bias of people see something, the more they see it, the more they believe it and then buy into it. I think leading in nicely into the, we've looked at what the OEMs can do to try and help that. But what about the...
51:15 Jake Roden
You're a man of many hats and have worn many hats for years, but from your retailer hat and your side of view of what could the retail groups be doing? We know there's quite a lot of retail groups who are stocking and taking on new entry brands, not just some of the smaller, more family run franchise sites, but also some of the bigger groups as well are taking on some brands. So how can they adjust at the minute to grow with that?
51:40 Ian Plummer
Fundamentally, from a retailer perspective, the arrival of more brands is an absolute bonus point. Not necessarily just because there's another brand and you might partner with one, but fundamentally because it changes the balance of the relationship you have with all of the REMs you work with.
51:54 Ian Plummer
Historically in the UK and Europe, we've got distribution rules which favor the brand over the retailer. If you look at the American model, it's very different. In America, a retailer might make 5% return on sales very regularly. In the UK, if you make one and a half, you're doing really well. That imbalance isn't something that I think is sustainable for long. Manufacturers have got profitability issues we touched on a minute ago. They don't have the means to provide the money to retailers to be single-brand.
52:20 Ian Plummer
Brand representatives in every site anymore. That's what historically every brand would prefer. Number one priority is and preference is having a single-brand representation every key city in the country. Fantastic, that's pretty site, brand boutiquey looking vibe. Number two is I want some representation. Number three is I've got nothing. At the moment they've got a choice between two and three. Number one is almost off the cards or it will be increasingly be off the cards. They're from a retailer perspective. The fact that they've got leverage because of choice an alternative to the brand that you've got means that you can say to the brand you've got, you know, we've got a great relationship, we've worked together for X years, nothing against the brand, you don't have to anything negative, can only be constructive, but saying, you don't have the means to give me enough ability to make the return on sale which is sustainable for my business. You helped write a business plan with me a few years ago that I'd spent money on the CI for, the tiles and the lights, they're there, we're sure of that.
53:16 Ian Plummer
The cars we said we'd be selling the right volumes, the right margins, well, they aren't there. So can you help me get to the number I need to get to? If no, I need to put in another brand or maybe another couple of brands. And that might mean your size of the side of the showroom becomes much smaller. The brand often might push back on that. They have done, they are. I think retailers will do well to push back further and there might be a brinkmanship game to play. But I think if you're a brand, it's very difficult to imagine you can go find an alternative retailer these days. I'd keep the two years notice period, thanks, and I'll...
53:47 Ian Plummer
Have authorised repair status and a few scars after that. Good luck finding another retailer. In today's world where everyone keeps saying there's not enough retailer space left anymore because all the sites have been filled and triple-franchised. So good luck finding an alternative operator that's going to find an alternative location that's going to run in parallel to another operator that's had the franchise for period of time and it's still an authorised repair while you're coming in into a cold territory. That's a very expensive equation. If you've got loads of money as a brand, you might want to do that, but they don't have loads of money.
54:14 Ian Plummer
So just think there's an opportunity without being negative to the brands to recalibrate the relationship between brand and retailer. And if you're a retailer, if you add in another incremental revenue source, but you keep the same footprint of site and maybe have three cars for three brands rather than nine cars for one brand, you've probably got a very similar overall cost base. You've got a couple of specific people doing jobs for a given brand here and there, but the after sales team is the same. You don't need another receptionist probably. You don't need another general manager.
54:40 Ian Plummer
So you basically have got incremental revenue streams over a relatively stable cost base, which gives you a far higher chance of making money. Therefore, from a brand perspective, you've got an operator that is stable and sustainable in your market area. It might not be single-brand. It might not be ideal, what you used to have in the past. But I think it's reflective of the way the world is going in the future.
54:58 Holly Mottram
Yeah, multi-brand sites is just everything you see now. The majority is multi-brand sites. And I feel sorry for the people who work in the retailers because they get new brands on board, new models, and they've got to learn about it. And we spoke about consumer expectations and trends earlier. They know a lot more about the product they're buying now because they do that research with AI online. So you as the salesperson in a retailer, you're expected to be an expert on that product. Now, if you've had a new brand coming, there's new models, the speed of turn, your knowledge has to change with that same time. So I think that's tough on the retailers that they've got to be.
55:29 Jake Roden
Over and above the consumers who are already improving their knowledge.
55:32 Holly Mottram
But also going back to the brand point of view, if you're resistant to this idea of having a multi-franchise site, it's often because you're thinking, if I have a brand A, B or C next to myself, then the consumer that walks in might just buy the other product. I think, yes, they might do. But given that we do all our research online, 70% of new car buyers in the research we do turn up to retailer without having to become a lead either. So you're not necessarily in anybody's CRM system. More like two-thirds of new car buyers do the same. We don't necessarily want to become a lead. We don't want to be in somebody's CRM.
56:02 Ian Plummer
We know what we want. We've come there, really having done that three months of research, having looked at 18 different brands, we very much are keen to test drive that particular vehicle. We don't want to have a stop sign consumer experience either where we get qualified and sat down and told which car we can buy. No, I'd like to try that car please. So as long as you've got the cars available within reason, you won't have them all in the showroom, they'll increasingly have to be outside. You might have VR solutions going forward more and and you might have to plan your test drive, you really do definitely want to drive one and get the right model bought in. As long as that car is there and it's explained to you well and the salesperson does a good job, unless you really were unsure in the first place, you aren't gonna go and buy the car in the next door bit of that same retailer space. The only reason you might do, really fundamentally, is for two points I think. Either one, maybe the sales experience wasn't good, possible, retailer doesn't do good job, not necessarily likely to do a better job in the next door bit of that same showroom.
56:57 Ian Plummer
But secondly, could be that the product just wasn't up to scratch. Okay, you lose. That's gonna happen anyway. You've got to back your product as an OEM, that's my point. And lastly, if you lose a couple of customers, not that your product was not good, it's just that somebody preferred a different one for whatever personal reason to them, you will lose some like that, but you'll win some in reverse. So I think that's something that people need to embrace. That old mindset of thinking, I've got to keep everything separate, because I've got to somehow control the consumer and not let them look at another product. Surely that's...
57:25 Holly Mottram
They're outdated now I think, for sure. Now I think we've got one last question for you before we wrap up. So if we invited you back in three years time, what do you think we'll be talking about that barely anyone is talking about right now?
57:40 Ian Plummer
I honestly don't think that many people are talking about the multi-franchise model to be honest with you. I'm going to stick with that point. I think it is only at the beginning of happening. What we see at the moment is more like dual franchise. Every now and then maybe triple franchise in a particular location. And I think fundamentally we will see many more supermarket department store type approaches where you imagine a Selfridges of cars. Selfridges generally
58:06 Ian Plummer
They manage the store, they employ a bunch of people, they don't employ all the people, brands employ most of brand specific people that are selling the brand specific stuff in that branded area within Selfridges, whether it be for men's suits or women's perfume or whatever. And they do a great job putting forward the brand message and so on. That feels to me a much more sustainable retail model that better links probably to the online journey that people want to use increasingly, but they want that connectivity between the online and the physical.
58:38 Ian Plummer
And that is, I think, a journey which is only starting right now and can only really work if the brands are open-minded, as I just mentioned, on accepting some of the need to change the financials that they are constrained by now and that the retailers are equally brave in their discussions with manufacturers and push in this direction, thinking of their long-term sustainability rather than just this quarter's numbers. Okay, I sold loads of Omoda and Jaecoo this quarter, it's great. Think about how your business might need to look in five years' time. And I think it's much more likely to be sustainable if it's multi-franchised.
59:14 Holly Mottram
I think that's a really nice point to end on. Definitely. Well, thank you so much for joining us. It's been a really, really interesting conversation. I hope you've enjoyed yourself.
59:24 Ian Plummer
I have. Great to catch up with you
59:27 Holly Mottram
Yeah, thank you so much,
59:29 Holly Mottram
Thank you for watching this episode of Talk Auto and Jake, thank you very much for being my co-host. How have you found it?
59:39 Jake Roden
Not a problem. Really enjoyed it and hopefully that'll be a chance for me to come back again in the future.
59:48 Holly Mottram
We do hope so. Now, as always, there's an email in our show notes if you'd like to write into the show. Remember to like, subscribe, wherever you get your podcasts. And we'll see you next time for another episode of Talk Auto.