The automotive retail landscape is rapidly evolving as dealerships integrate digital tools to enhance customer experiences. Online sales, virtual showrooms and AI-driven chatbots are becoming standard, offering buyers greater convenience and transparency. This shift is also reshaping dealerships operations, with many adopting a hybrid model that blends physical and digital experiences.
Digital innovations driving change
- Online sales and virtual showrooms: With the shift to e-commerce, many dealerships are using online sales platforms, allowing buyers to browse and purchase vehicles from the comfort of their homes. Virtual showrooms provide an immersive experience, replicating the in-person dealership visit and offering a 360-degree view of their potential new vehicle.
- AI-driven chatbots: These chatbots have made customer interactions seamless, answering queries, booking test drives and even providing tailored recommendations based on buyers’ preferences.
In response to these technological advancements, the traditional dealership model is evolving into a hybrid model that combines physical and digital experiences for customers.
Subscription services and home delivery on the rise
Subscription services and home delivery options are gaining popularity. Larger manufacturers are increasingly offering subscription plans as part of their broader digital strategies, giving customers access to vehicles without long-term commitments. These services, which allow customers to pay a monthly fee for the use of a vehicle without the long-term commitment of ownership, are gaining traction as consumer preferences shift toward flexibility. This pushes the industry toward a more customer centric approach.
Tax reliefs and incentives
For retailers, this evolving landscape presents opportunities in expanding its marketplace and customer service whilst also offering the potential for enhanced tax reliefs, such as:
- Capital allowances: Dealerships investing in new digital infrastructure, such as online platforms or AI tools, may be eligible for capital allowances.
- Research and Development (R&D) tax credits: Dealerships pioneering innovative approaches, such as developing proprietary software for digital sales or enhancing virtual showrooms, may qualify for R&D tax credits.
The next step
Should you wish to explore how your dealership could benefit from capital allowances, R&D tax credits, or other tax reliefs, please contact Brian Carey on b.carey@uhy-uk.com or your UHY automotive adviser.
