If they act now, dealers can position themselves to compete in the new automotive retail ecosystem.
In our last column, we made the case that mega-trends — which dealers have very little control over — are threatening to disrupt the automotive retail model.
We saw app-based transportation (like Uber, Lyft, and Zipcar), huge investment in electric, autonomous, and shared mobility; the rise of global warming consciousness, and changing demographics and social trends all as evidence of a rapidly changing automotive retail landscape.
We even see OEMs making a play for B2C business through car sharing, which was once exclusively the domain of dealers.
The key question that we are all asking is: what can dealers do now to help prepare themselves for the future?
As a starting point, there’s a simple fact we need to state: the most interesting thing about industry disruption is that it’s just as much about future opportunity as it is about future threats, and let me tell you, there’s a BIG opportunity in retail New Mobility.
Alert and innovative dealers are well positioned to take advantage of coming future mobility as they already have the real estate, service, and detail facilities and experienced sales staff, all of which become barriers of entry to any new upstart.
As well, most dealers are naturally entrepreneurial, able to sniff out opportunities in their market and make the most of it.
One of the things that dealers can do today is investigate the “Car as a Service” or CaaS model through car sharing and subscription activities.
Recently I spoke with Mark Thomas, Vice President of Marketing and Alliances at Ridecell, a car sharing platform provider, about the opportunities he sees for dealers in New Mobility.
“Dealers are in one of the best positions to capitalize on the growing shared mobility market, but most hold steadily to the belief that their role is to sell and service privately owned vehicles,” said Thomas.
“While purchasing a vehicle has been the norm for multiple generations, we’re seeing Gen Z and Millennials in particular who don’t subscribe to the idea that they need to own a vehicle. It’s much simpler to use a smartphone to request a ride or reserve a car to use for short trips.”
Dealers who have already taken the step towards an active CaaS operation also see it as a way of future proofing their business. “We see a future world of autonomous cars picking people up, so we wanted to gain the necessary fleet experience now. Plus, it’s a fantastic lead generator for selling cars today,” said a senior executive of a well known dealer group in the U.S.
With that, it’s worth pausing for a moment to think about how a CaaS operation could drive new business into your dealership. Take a look at Sales Operations, especially the Business Office. What new program can be sold that could really benefit the customer?
How can Fixed Ops benefit from having a pool of vehicles available for the short term needs of a customer? How can such ideas fit nicely into your local dealer trade area?
Obviously, there are hurdles and costs associated with running a fleet, and asking how these can be minimized and streamlined is extremely important.
In future columns I will be taking a deeper dive into areas in the dealer business that can really benefit from CaaS and other New Mobility ideas. In the meantime, I would encourage you to carefully consider what it could look like and what your needs may be to help build a pathway forward.
If you’ve been asked by your OEM to build or significantly update your facility, then these issues are urgent to you right now. You’ve been asked to expend many millions of dollars for a long term retail proposition that could be significantly different in just a few years. Therefore dealers need to persistently ask the hard questions to their OEM to make sure the overall company direction directly matches the request of your regional office facility.
If it doesn’t, then ask “why?”, and keep asking until you receive an answer that makes sense.
In a nutshell, there will be many opportunities, as well as threats, that dealers need to look out for as we move towards New Mobility.
Ways in which dealers can take active steps towards making their business relevant for the future, as well as supporting their current core operations, are the ones which will succeed and keep the dealer business viable.
Not only this, dealers who are planning to build or renovate, need to start thinking right now to ensure their money is well spent.
Most importantly though, my advice for every dealership management team is be aware that change is coming, and to take time to think through the long term implications on the business.
That means actively reading about New Mobility change and strategizing the future direction of the dealership. The decision to do that now will greatly influence what you’re doing in 20 years time, and the long-term success of your dealership.
