Is It the Time for an Industry Overhaul?

Everyone is on an unexpected and steep learning curve. Responding to an abrupt change in the automotive retail environment is a challenge that dealers are meeting nationwide in varying capacities. Whether it’s embracing at-home test drives or online sales, to service department pick-ups and drop-offs, no one is doing business the way it was six weeks ago.

An idea slowly taking hold in the automotive industry is that things will not go back to the way they were very soon – perhaps ever. Social distancing practices aside, opening Pandora’s Box for online sales is one aspect that the lid probably will never close on. But is it possible that now is the time for a major shift in the automotive industry?

As the nation waits impatiently for stay-at-home orders to be lifted, these four areas could be ready for major changes.

EVs Still Forging Ahead

Fewer than 3% of vehicles on the road in the United States are electric vehicles. Of the 17 million new vehicles sold in 2019, only 330,000 were EVs. Yet, nearly every carmaker has a long-term plan centered around electrification.

Tesla’s Model Y has started deliveries this spring, the VW ID Crozz is expected to be released on time, and Triton has announced an 8-seater SUV with 700 miles of range. EV models are expected to be released on time and consistently.

As the effects of the pandemic recede, it would be a great opportunity for governments and carmakers alike to incentivize EV adoption. Pairing incentives with a ‘cash for clunkers’ program, for example, would give Americans reasons to go for EV tech.

Online Sales Going Nowhere

Once online sales were let out of the box, it was clear that it would be here to stay. Whether that means off-site test drives and deliveries to fully-online ordering, financing, and delivery, the online presence for car sales has matured very quickly.

This is an area dealers should be investing time and resources to capture their market share and develop a unique service proposition. 

Community-Level Marketing

After more than a month of messaging that states, “We’re here for you” and “We’re a service-based business”, that appeals to the community aspect, customers will be sensitive to what marketing looks like post-pandemic.

Rather than turning on a dime and re-rolling the “You deserve the new _____” message, dealers and carmakers will need to hybridize their marketing. It will turn customers off to hear the same song and dance as previous. Expect shoppers to respond better to socially responsible messages in marketing and how your people and product are different. 

Autonomous Vehicles More Relevant

What nearly everyone has experienced during the COVID-19 pandemic is a shortage – a product shortage or an unexpected delay in delivered products or services. It’s an area that autonomous vehicles could have alleviated pressure, and an opportunity for AV developers to improve sentiment that may be causing a delay in adoption.

AV vehicles could keep delivery workers at home rather than exposed unnecessarily to the virus. Safe mobility would be possible with a lone passenger in a vehicle rather than a driver and occupants. Medical supplies could move 24/7 to reach their destination faster.

The automotive industry is due for an overhaul. In a time where everything else around us is changing, could it be the time the auto industry changes how it operates?

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Car Biz Today, the official resource of the retail automotive industry.