It’s time for the industry to get used to 'VUCA'
Philip Nothard, Insight and Strategy Director,
Welcome to the first edition of AutoFocus in 2022.
Welcome to the first edition of AutoFocus in 2022 and our fourth issue in total. I hope you are feeling well rested after the festive break and ready to tackle another busy year.
Where do I begin? The challenges of 2021 have been well documented by now. It was, again, a year filled with frustration thanks to new vehicle production problems, coronavirus restrictions, disrupted wholesale and retail vehicle markets, record used car prices, and rising inflation – the list goes on. All of this coincided with a dramatic rise in EV sales over the year.
2022 is unlikely to be any different. I recently learnt of a new acronym, VUCA, and I think this is the next big buzzword for the automotive industry.
VUCA stands for volatility, uncertainty, complexity, and ambiguity. It’s a term borrowed from the military that’s used to describe the situation of constant, unpredictable change, and it perfectly captures the situation we find ourselves in today as all industries and businesses gear up for another year that continues to provide pandemic-related challenges.
The old days of retailers typically making a profit in Q1 and then focusing on maintaining profit in Q2 and H2 are gone. What used to be seasonal norms no longer exist as everyone adjusts to an entirely new trading climate, and with demand likely to outstrip supply of vehicles for some time, Cox Automotive’s view is that the market will not return to pre-Covid norms.
"Cox Automotive’s view is that the market will not return to pre-Covid norms."
Philip Nothard, Insight and Strategy Director, Cox Automotive
Our advice is to adapt to VUCA and embrace change. Businesses must be resilient, continue to price cars correctly, market them properly, image and promote them properly, and make the best of the new norm. Only that way will their products remain attractive to consumers and turn them a profit.
It also helps to be well informed on what’s happening in the market, and that’s where AutoFocus comes in. As always, we aim to provide valuable context on the most relevant and important topics impacting the automotive industry today.
In this issue, we delve into the intricacies of the new car supply chain and explain why production still hasn’t improved. We also describe the impact this is having on used car supply and values and what the next few months could look like in that regard.
As ever, this issue includes guest features, including regular contributor Grant Thornton, and we’re delighted to welcome BP Pulse and the ICDP for the first time.
I hope you find this edition of AutoFocus insightful and that it provides context to the challenges you are facing right now. If there is anything you want to learn more about or see in future issues, then please do not hesitate to contact me, but for now, enjoy the issue.