A new report concludes that dealerships will be gone within a decade — Canadian automotive industry experts respond
According to a new report published by RethinkX, an independent think tank based in San Francisco, California, car dealerships are set to become extinct within less than a decade.
“The report researchers did not look at all the angles,” said John White, Canadian Automobile Dealers Association President and CEO.
“I don’t foresee the doom and gloom that these think tanks or experts predict,” White said. “We’ve been dealing with many predictions over the past 15 years or so with the advent of the Internet, as it pertains to the demise of the car dealer in the traditional business model.”
The report, prepared by James Arbib, a technology investor, and Tony Seba, a Stanford University economist, concludes that technological advances, the growing demand for EVs and the car-sharing economy will cause dealerships to gradually disappear over the next seven years.
“If you look south of the border at the Warren Buffetts and George Soros’s of the world, they’re buying and investing big-time with stocks of automotive groups,” noted White. He added that the report was not “thoroughly thought out.”
“The assumption that the technology is going to drive consumer behaviour is naive…It may work for an iPhone, but we’re talking about transportation, safety, independence — basic things that we as humans cherish,” said Chuck Seguin, President of Seguin Advisory Services.
Range anxiety and the temperamental nature of batteries are other obstacles to the adoption of EVs, said Seguin.
The authors predict in the long run, EVs will be far less expensive to operate than gas-powered vehicles. “They may be cheaper to operate, but they’ll probably be more expensive to acquire for a long time,” notes Seguin.
Seguin points to the Chevy Bolt all-electric vehicle, that is still high compared to the competition, priced at about $36,000 — that includes government incentives, in Ontario of up to $14,000. Forty percent of the vehicles on the road are cheaper than $36,000, notes Seguin. He said it’s possible that 20 percent of our fleet may be EVs by 2050.
“It’s going to be quite a long time — and I think dealers are going to be around for a long time.”
