THE CAR MARKET CHANGES ITS SKIN: FEWER VOLUMES, MORE COMPLEXITY

By Tommaso Carboni, Country Director of bee2link group Italy

The Italian automotive market is undergoing a profound transformation that is not limited to the ecological transition but involves the entire economic model of the supply chain. Amid geopolitical tensions, rising raw material and borrowing costs, and still uncertain demand, the sector now finds itself in a new and more fragile balance than in the past.

Over the last ten years, the scenario has completely flipped. Before the pandemic, supply systematically exceeded demand: dealerships accumulated stock, and price lists were supported by continuous discounts. Then, the supply crisis and production halts drastically reduced the availability of new vehicles, pushing consumers toward used cars and driving up prices on both fronts.

Today, however, the market has not recovered pre-2020 volumes. Fewer cars are being sold, but at higher prices—a combination that makes demand more cautious and selective.

New is no longer enough: margins under pressure

In this context, the role of dealerships is changing. Selling new cars remains central to attracting customers and maintaining the relationship with the brand, but it no longer represents the primary source of profitability.

The increase in financial costs has made vehicle stock a critical element: keeping cars sitting on the lot means immobilizing capital at a time when money costs more. At the same time, competition among brands—increasingly numerous in the Italian market—has further eroded margins.

The result is a paradox: new cars continue to generate traffic but contribute less and less to profit.

Used cars become the true engine of business

Profitability is increasingly supported by the used car market. The numbers confirm this: in Italy, approximately two used cars are sold for every new one, and the total value of the sector clearly exceeds that of the new market.

This dynamic is fueled by several factors. On one hand, the rising prices of new cars push many consumers toward more affordable solutions. On the other, the Italian car fleet—among the oldest in Europe—guarantees a constant flow of vehicles to be reintroduced to the market.

Buyer behavior has also changed: today, those who enter a dealership have already compared prices, mileage, and features online and are less willing to negotiate without a solid basis.

The challenge of used cars: efficiency above all

While used cars represent an opportunity, they also require much more rigorous management than in the past. The margin is not built during the final negotiation, but throughout the entire process.

Inaccurate valuations, long rotation times, or uncontrolled reconditioning costs can quickly turn an opportunity into a loss. The most delicate moment is between the trade-in of the vehicle and its return to the market: every day of delay increases the risk of devaluation and reduces profitability.

For this reason, the most efficient networks aim to standardize processes, reduce times, and monitor every phase carefully.

From negotiation to data: the digital revolution

Used car management is increasingly becoming a matter of data. Valuation tools based on updated market information, dynamic pricing systems, and integrated platforms allow for faster and more precise decision-making.

Digitalization no longer concerns only the online showroom but the entire organization: from the initial appraisal to the final sale, passing through the workshop and logistics. The goal is to reduce inefficiencies and ensure consistency across different locations, especially within large groups.

In this scenario, the dealer evolves from a seller to a manager of complex processes, where technology and operations are strictly integrated.

Three markets, one single balance

Today, the economic sustainability of dealerships depends on the ability to balance three distinct but interconnected areas.

New cars continue to be fundamental for generating customers and fueling the flow of trade-ins. Used cars represent the main driver of marginality. Finally, after-sales services guarantee recurring revenue and higher margins thanks to maintenance and assistance services.

Alongside these are financial services—such as loans, leasing, and insurance—which accompany the customer throughout the vehicle’s life cycle and contribute increasingly to overall profitability.

A smaller but more sophisticated sector

The Italian car market is therefore transforming into a more complex and structured system. Volumes remain lower than in the past, but value is distributed across more phases and requires different skills.

It is no longer enough just to sell cars: one must know how to manage stock, data, processes, and relationships over time. In this new balance, the difference is made by operational efficiency and the ability to adapt quickly to a constantly evolving context.