Further evidence of our sector opening up again following two years of disruptions, was the in-person AEA AGM & Conference which took place in London on Tuesday.

Back in the salubrious surroundings of One Great George Street in Westminster - just a stone's throw from the Tesco where as a junior civil servant you are taught to fill suitcases with booze - this event followed on from 2021's Zoom version and 2020's cancellation. I got the impression that the representatives of manufacturers and the handful of dealers in attendance were pleased to be back together for what is always an enlightening and social occasion.

As ever the event kicked off with a series of presentations by invited experts. This year there was a focus on the economy, on the efforts to achieve Net Zero and a discussion on where the next gen of tech developments will take us. All fascinating stuff that engaged the delegates in the room and lead to some interesting conversations over lunch. I will include more detail in a subsequent issue of Service Dealer magazine.

What I found particularly interesting though, were the thoughts of the incoming President, David Withers of Iseki, regarding where he thought our dealer network could be heading over the coming years.

Future for dealerships

In his inaugural address David considered what the situation is like for different areas of the network and posed the question of what is going to happen to dealers in the future?

For example he spoke about how some dealers have been consolidating over recent years. How for certain dealerships this has been driven by their manufacturers, with the desire for them to be bigger and to absorb neighbouring dealers’ areas, spreading fixed costs across larger territories.

"We have seen some of these larger dealers become importers and distributors in their own right – blurring the lines between dealing and distributing," he said. "I imagine this approach will only increase in the future."

David went on to say that much of what we do in our country, follows on from what happens in the largest market in the world, the USA. "In the US," David explained, "the corporatisation of dealers is further forwards. Large venture capital outfits have been buying dealerships and then expanding their operations both geographically and in breadth of lines held. I think we will see more of that here."

An astute observation as we certainly have seen the creation of various so-called 'super dealerships' over here in recent years - with particular manufacturers clearly favouring this route. 

David also spoke on an area we've touched on in this Weekly Update in recent times, and indeed will be featuring in the next issue of the magazine, that of dealership succession.

"As dealer principals age out and look to retire, succession plans are not always there for family members to continue the dynasty," he said. "And so to monetise the going concern, rather than simply close and liquidate, must be a potential way forward for some dealerships."

David acknowledged  there will be divergence in dealers though. As some move to become larger, more corporate, under new ownership structures, he believed, others will stay family-owned, with low overheads – "Not wanting to be everything to everybody, but specialists in their niche," is how he put it. "Nurturing their relationships in their chosen customer base – which can be very successful."

Where are the new dealers?

But what really intrigued David he said - and I agree this is absolutely the million dollar question - is where will the dealers of tomorrow come from?

David felt that dealers who started in the 19th century, in the pre-internal combustion engine age, were often blacksmiths before they become farm equipment dealers. 20th century dealers, he proposed, often came out of the automotive trade and were still at heart, internal combustion engine specialists and engineers - with hydraulics and diesel their core backgrounds.

"But where will the 21st century dealer start-ups come from?," he asked. "Will they spin-off from software developers? Mobile phone repairers? AI developers?

"If the future products can be diagnosed and fixed remotely, with the key items in the toolbox a laptop and a mobile phone connection, rather than the more traditional spanner and a hammer, what does a physical dealership look like?"

I think David really did identify a key question here that the industry will need to address in the coming years. He didn't have a simple answer to the conundrum but he did believe that for those companies that embrace these changes, they will most likely succeed in this evolving world.

But what do you, our dealer readers think? From where do you see new dealers emerging in subsequent years? Let us know in the comments below.