Automakers are rethinking plans for innovative city center retailer formats and instead looking at ways to increase their visibility in the suburbs in response to a shift away from large metropolitan areas as a result of the pandemic.
That was one of the key takeaways from panelists who participated in the Automotive News Europe Shift online event, "Sizing the Dealer Network in the New Normal."
"We need to fully understand the socio-demographic shifts we have seen with COVID-19 and which ones will continue to gain traction in a post-COVID world," Spiros Fotinos, director of Lexus Europe and head of EV planning at Toyota Europe, said. "We see suburbs becoming sexy again, as people trade balconies for gardens, and we need to understand where the luxury consumer is physically going."
Fotinos said Lexus was prepared to expand its coverage to the suburbs if demand there dictated it.
- For the full discussion on Sizing the Dealer Network in the New Normal, which took place Dec. 3, click here.
Overall, automakers are looking to reduce the size of their dealer networks, said Paul Dillamore, managing director for the UK and Italy at Urban Science. "But there is always this trade-off about being able to implement financially viable locations in areas of slightly lower potential, like suburbs, which are becoming increasingly talked about."
In contrast, automakers are backing away from grander plans to reinvent their presence in cities, Dillamore said.
"Two years ago it was very hot to recommend locations for alternative retail formats, like flagship stores in cities," he told the panel. "Now they have come to a simplified understanding that that is not always going to work except for a limited set of locations where the opportunity, the customer base and their local profile would support that."