I’ll admit it…I am a traditionalist.  I grew up in the automotive industry and that industry has not changed in many years.  I am comfortable, so to speak.  To me the dealer is still the king…they take risks, they invest in real estate, facilities, people and training, tools, inventory, advertising and are the manufacturers face to the customer…the final and lasting touch point!

I get very concerned when companies such as Tesla, and others before them, tried to dis-intermediate the dealer-customer relationship by having “factory” owned sales points.  I get equally concerned when we talk about direct sales of automobiles via the internet. I see a huge risk for the buyer . Where do they turn when they have a problem…lets face it, “all” vehicles have problems from time to time. How is it possible for the manufacturer to cover the services that the dealer provides?  It is not the same scale and not their core business.  I must admit though, that I am a bit embarrassed to consider that in the US, and to some degree in other regions, the system of dealers is supported by law.  Wouldn’t it be nicer if it was universally supported by the market?

But just when the fear of these shadows closes in on this traditionalist, here comes good old wisdom and initiative.  Instead of allowing others to dictate what will happen in this space, AutoNation (www.autonation.com), the largest dealership group in the United States, is changing the game by going on-line itself, AutoNation’s plan to change the retail game,

Simple!  AutoNation will launch “online deals by the end of the year by introducing SmartChoice Express, a new digital storefront at 30 dealerships in south Florida.  When fully implemented in late 2015 digital storefront shoppers will be able to select a vehicle, arrange financing, and actually buy the vehicle online, electronically singing purchase and finance documents from their home.  Kind of like Apple or Amazon. The customer still has to take delivery at the dealership but they are greeted by special attention and a very short time at the dealership.

What AutoNation is doing is heading off the digital attackers and the dis-intermediators and preserving the business for themselves, placing themselves in a position to deliver the identical services they always have been entrusted to deliver but in a modern way that is even more convenient for the shopper!

And along the way, the need for deeply integrated business systems, security, digital presence, privacy, etc. are all essential, more so than ever.

It seems like  the old saw of “do unto others before they do unto you” is alive and well and benefiting digital age consumers and preserving the best way of doing automotive retail business.  Everything changes but everything remains the same…amazing!  Digital wrapper on proven business practices!

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  1. Sachin Balmiki

    Hi Larry,

    Here in India some of the Automotive manufacturer have opened online portals to purchase vehicles online, however this is something right now a pilot initiative.

    I also agree dealers are kings as they face the customers directly & it would be very impractical for manufacturer to face retails customer given the volume of complaints & day today issues for which customer would like to have a service point to immediately go to & get things fixed.

    (0) 

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