Digital Retail & EV Adoption
As more software-enabled vehicles enter the market, dealers will need to follow Apple’s Genius Bar model, which brings together employees with the manufacturer’s underlying technology to address customer service needs. The increasing adoption of electric and autonomous vehicles will also shift the maintenance needs of engine oil changes and battery repairs to troubleshooting. Manufacturers must also ensure that their dealer networks can develop with their products.
We could also see some form of new contractual arrangement whereby OEM dealers take on the role of intermediaries for electric vehicles. With less space needed for service and showrooming, dealers could reallocate existing space for charging electric vehicles and autonomous parking to the fleet.
Digital Retail & Customers
In addition, many electric vehicle OEMs are willing to separate product production and leverage contracts with manufacturers. Faced with falling battery prices, their production models increasingly resemble iPhones rather than conventional pick-up trucks. As a result, customers are increasingly switching from online to offline channels to direct OEMs to their preferred dealers, rather than staying with their local contacts.
Digital Retail & OEM’s
Challenger OEMs are brands that have survived the test of time and hold a special place in customer’s hearts. They compete with automakers that have mastered the art of making and scaling high-quality products over the past decade while managing the cost of what they do and how they are made. The drive for agencies – a model that some OEMs have pursued more successfully than others – requires dealers to rethink their business models and values.
Digital Retail & Dealer Network
Dealer networks must balance short-term pragmatism with long-term structural change and innovation. While this transformation has allowed OEMs to develop completely new sales and service models, dealers must be at the forefront of developing and defining their roles in this rapidly changing landscape. Dealers must prepare to renegotiate their contracts with OEMs and understand the impact on their P & L, balance sheets, operating models, and taxes.
Digital Retail & Transition to Electric
The transition to electric and high-tech vehicles is on the verge of turning the car dealer landscape upside down, eroding profit margins, and triggering massive industry consolidation. Volvo is the latest automaker to revamp its marketing and Digital Retail operations to make its vehicle sales fully electric by 2030, a process that has been accelerated by the pandemic of coronavirus.
Recently, Volvo launched the C40, which recharges its second battery-powered long-haul vehicle. The brand’s first all-electric model, a sporty crossover SUV called Lyriq, is scheduled to be available in spring 2022. Cadillac aims to be 100 percent electric by 2030 and offers buyouts to dealers in the US.
England and France are planning to ban the sale of fossil fuel vehicles by 2040 and Germany offers significant financial incentives to encourage consumers to purchase electric vehicles. Cadillac, which aims to be 100% electric by 2030, will start the transition with the launch of the all-electric Lyriq in 2022, and 150 dealers have already accepted purchases. The focus is on Digital Retailers who don’t want to make the huge investments to sell electric vehicles and provide services that can run hundreds of thousands of dollars.
Skepticism among Cadillac dealers underscores why investors are driving up the value of electric vehicles, but questions remain about consumer interest and how Digital Retailers will serve them. Dealers of some brands say they are weighing costly investments in equipment such as upgrading electrical systems amid uncertainty about demand for vehicles, which account for about 2% of American vehicle sales. Digital Retailers say they have not yet placed orders for electric models and are worried about sitting on their lots.
Digital Retail & Tesla
With the shift to electric vehicles, new players are beginning to change the way cars are sold in the United States. Tesla Inc. has become an electric-car juggernaut by selling directly to customers, not through franchises – a model that several start-ups want to follow. On the other hand, traditional automakers are tasked with transferring their plans for electric cars to dealer networks that are now making money selling gasoline-powered vehicles.
That perspective began a decade ago when Tesla Inc. “s electric vehicle success story found that the dealer system was incompatible with the customer training and sales experience it had in mind. National laws vary to the extent that direct sales to vehicles and car showrooms owned and operated by manufacturers can offer test drives and whether negotiations are allowed to tackle a restrictive market one-on-one.
Digital Retail & Software Development Companies (SDC’s)
According to SDC’s viewpoint of the future is like a mix of full-function stores, showrooms, satellite service facilities, theme parks, and pop-up Digital Retail. They have all the functions of a car dealership – sales, service, and parts – under one roof.
Their proprietary software platform enables them to collect dealer information, capacity data, and insights in real-time. Today’s new-age EV companies not only offer stronger products but also operate from a different economic point of view. Their simplified electrical and electronic architecture and software-driven approach reduce costs and enable them to achieve premium prices.
Digital Retail & Manufacturers
Manufacturers need a network of dealers across the country to represent them and not just spread the brand through sales and service. The aim is to improve the presentation of the brand in the network together with manufacturers and their dealer partners.
The National Automobile Dealers Association sees dealerships as a lifeline for consumers, offering advice and options for easy maintenance if something goes wrong or needs to be updated in the future. According to various industry planners, dealers also pick and return vehicles that need service and repair, especially high-end products. That is why Nissan, Toyota, Volvo, and other Digital Retailers are sticking to their new plans.
According to Jonas, the pressure to change B2B sales models such as ride-sharing, food delivery, package delivery, and mega fleets could also become a nuisance for dealers. He said states could make significant changes to dealer franchise laws to allow direct sales to new brands. Both Digital Retail groups declined insider inquiries into how electric vehicles and changes to sales models could affect the industry.
Digital Retail & Dealership
Autonation, the nation’s largest dealer group, is studying how changes in vehicle architecture and sales techniques will impact its business and developing a strategic response, said Marc Cannon, the group’s chief customer experience officer. The changes start now and could take years, giving Digital Retailers time to respond, Cannon said. Brad Sower, a car dealer, is spending money to prepare for the coming wave of electric models from General Motors Co.
Digital Retail & ARKO
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