A couple of stories related to the future of the dealership business model caught my eye this week. Cox Automotive released the results of its Future of Digital Retail Study. Consumers want to do a lot of the new car purchase online – 83 percent want to complete at least one purchase activity online, and 71 percent want to get detailed info about the deal online.
But the dealership is still a very important component of the purchase. Eight in ten of those surveyed would never purchase a car without a test drive, seven in ten would never purchase a vehicle without seeing it first. Consumers still rely on dealership consultants to learn about vehicle-specific products, features, and capabilities, says Cox. It recommends that dealers pair a robust online presence with a seamless transition to a dealership experience.
Also this week, Scott Keogh, president of Audi of America, told the Automotive News World Congress that the arrival of electric and autonomous vehicles will bring lots of opportunity for auto dealerships in the areas of new vehicle sales, used vehicle sales, service and parts, and new digital services. The opportunities seem limited in scope, however.
On the new side, the luxury segment seems the big beneficiary, if I follow his reasoning. On the used side, ironically, the benefit will come from folks who still want to buy non-electrified vehicle. But that can only last so long.
On parts and service, Keogh figures the non-electric car volume still on the road is so large that dealers will need to service them for years to come. Again, a finite opportunity.
I am not sure what the digital services opportunities are, but then I didn’t hear his speech, I read about it in Automotive News.
In this week’s issue, we have a new contributor, cyber security expert Rick White. He details some of the digital risks dealerships face. Did you know that dealerships are considered financial institutions and are therefore subject to some of the same penalties if they suffer a cyber attack?
Also this week, our friends at Crowe Horwath are back with some advice on retaining talent in a buy sell. I sum it up as “Don’t throw the baby out with the bath water.”
Then there is Transaction News.