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NADA – Part two: Dealership of tomorrow update

NADA – Part two: Dealership of tomorrow update

Leading industry analyst updates his crystal ball gazing and sees ongoing roles for dealers

GLENN Mercer, the independent automotive analyst retained by the National Automobile Dealers Association to write his definitive work on the future of car retailing, Dealership of Tomorrow, presented an update  that held out the prospect that dealers do indeed have a key role to play in the automotive space of the future.

His presentation at the NADA Convention updating his theme of The four horsemen of the Carpocalypse which focused in particular on EVs, as indeed was the convention program.

There were 20-plus workshops/sessions relating to EV sales, charging, customers (who will be future EV customers) and even an EV Solutions Centre at which the NADA would answer any questions dealers might have about EVs.

Mr Mercer’s The four horsemen of the Carpocolypse are in no particular order: The connected car (CC), Mobility Services (Uber etc.), Autonomous Vehicles (AVs) and Electric Vehicles.

The connected car refers to the bidirectional (send & receive) communication with systems outside of the car.

While CC isn’t new technology, it has recently accelerated due to improvements in the science and declining costs associated with it.

The issue is in the monetisation of the CC as there is a huge opportunity (it is unknown how ‘huge’ but it is real) and it’s contentious whether the OEM will share this revenue with the dealer.

The impact on the dealer is actually positive in terms of CC, however the level of impact has diminished.

Mobility Services (Uber etc) were predicted to be the demise of dealers as customers would use ride hail and ride share services to replace car ownership. But the facts show that ride hail/share services have become a complement to personal car ownership, rather than a substitute. Therefore the threat from mobility services has receded, for now.

Autonomous Vehicles were predicted to again replace car ownership as customers would rather be driven by a fleet of vehicles than to own a personal car. This is still a possibility, as Avs are on the way. However, they are significantly delayed when compared to the predictions made by the tech companies that are developing the AVs. The consensus view is this is likely 10-20 years away at best.

EVs are coming and their share of the market is finally accelerating. The forecast for the US market is that EVs will make up about 8 per cent by 2025.

The recommendation is that dealers need to move rapidly to evolve and adapt to the coming EV wave.

The existential threat to dealers when it comes to EVs is that the OEMs need to sell these vehicles through agency or direct to make the economics stack up. Dealers need to prepare themselves for a future where they are franchisees for some brands, agents for others and delivery centres for some direct selling brands. In some cases, they might be all three to the same brand.

This article is part two in a three part series. Don’t miss part one and read on for part three.
This article was first published by Go Auto News Premium on 19 March 2022. Licensed by the Copyright Agency. You must not copy this work without permission.
This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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