With the recent COVID-19 pandemic impacting the current state of the economy, customer buying behavior is evolving. The car-buying public is becoming more hesitant to commit to a vehicle purchase or even to a multi-year lease while expecting solutions that keep them healthy and safe. Car dealerships must shift to new opportunities and business models in this new age of transportation to adapt to these changing behaviors.
We’ve witnessed how CASE (Connected, Autonomous, Shared, Electric) technologies are transforming the automotive industry. In the Retail Automotive sector, these technologies bring opportunities to differentiate and expand businesses that have been relatively unchanged for the last 100 years.
Let’s take a look:
OEMs are taking advantage of connectivity to do Over The Air software downloads remotely, without dealerships. However, instead of being bypassed, dealers can leverage the latest connectivity technology to build tighter relationships with customers personalizing their vehicles with entertainment and other dealership-related services subscriptions.
A dealer’s 10-year business plan likely includes autonomous vehicles. We envision ways to augment dealer customer service in the shorter term, with passenger-less L4 AV as part of dealer fleets: Drive to customers for test drives, or offer different types of ridesharing services on low density, low-speed routes. Running a shared service today is a great way to connect with shared autonomous services of the future.
For most people, their car spends 95% of its time unused, meaning there is vast room for efficiency improvements created by shared fleets, and therefore lower overall household transportation costs. New smartphone-based app technologies have made it much easier to grab a shared car on the go, and pay for actual usage, rather than paying all the time. As well, many people find that occasional Uber or Lyft usage is a great supplement to other shared mobility transportation such as transit and micro-mobility.
The same shared mobility technology can also be used to offer full no-touch experiences like no-contact test drives and no-contact service appointments. In addition, shared fleets provide affordable vehicle access for ridesharing and delivery drivers. Shared vehicles offer an immediate opportunity for dealers to create a new sales channel and customer base.
While electric vehicle sales as a percentage of the market are relatively small today, sales are growing rapidly, with a forecast of 30% of all new car sales by 2030. Though they have 50% lower maintenance requirements, there is an opportunity for dealers to sell chargers and Fast Charging as a Service through fast charge locations.
It’s quite clear that CASE technologies will significantly impact automotive retail over the next 10 to 20 years, and dealers must be well prepared for this. However, the exciting part is that industry disruption always brings new opportunities. Dealers who engage in shared mobility platforms today have the ability to open up an entirely new customer base, reduce costs through improved fleet management and move towards transforming the dealership into a mobility hub for autonomous transportation.
Author: Diptii Tiiku, Sr. Director of Corporate Marketing, Ridecell