Automation is at work in the automotive industry. Processes in manufacturing are now driven in large part by AI-powered machines that can operate round the clock rather than an eight-hour shift. Fewer journeyman-status employees like tool-and-die makers and machinists need to be on staff. From assembly to painting, automotive plants are largely mechanized.
Yet, despite automation in automotive manufacturing, the workforce has grown overall. In the past decade, the US Bureau of Labor Statistics shows that the manufacturing workforce in ‘motor vehicles and parts’ has grown from 661,000 to just over one million in 2019.
What does that mean for automotive retail, though? Can dealers expect automation to complement or constrict the dealership design?
How Manufacturing Changed Due to Automation
Automakers are faced with a dilemma as automated processes enter the equation: do they replace their employees who need the income to support their families, or does it make them more efficient? In some cases, a machine can do the same job as a person but much faster, requiring the employee to be reassigned elsewhere. In other cases, the machine makes them better at their job. Such is the case with Hyundai’s exoskeleton that improves an assembly worker’s ability and capacity to perform overhead tasks.
The human workforce isn’t being replaced in auto manufacturing – at least, not yet. The number of workers has climbed by 50 percent in the same 10 years that much of the automation has entered the equation.
What Does It Look Like for Auto Retail Then?
Automating the sales process is already in play. Carvana’s towering vehicle vending machines, for example, let car buyers complete their purchase without a middle-man salesperson. Shoppers can explore certain vehicles in VR rather than in person, and shop-at-home car-buying can also be included in automation.
These types of automation threaten the livelihoods of automotive retail employees. And there are many. In 2019, nearly 1.29 million Americans were employed by auto dealers, up from 989,500 in 2010. Should the sales process become increasingly automated, it risks putting hundreds of thousands of people in the unemployment line.
But what makes auto sales more resilient to automation? The people; the customer experience.
The Personal Touch
Autotrader research shows that more than half of car shoppers make their initial sales contact in person by walking into a dealership. 81 percent were satisfied with the test drive process, a factor that continues to make Carvana’s dispensary model tough to embrace.
More than half of those surveyed would spend more to buy from a dealership that offered a preferred experience, and nearly three-quarters would visit the dealer more often if the sales process was improved.
All of these statistics prove that customers value the personal touch of a car dealership. Despite the lack of trust being overcome in auto retail from years of deceptive practices, they still prefer to deal with a ‘real live person’ than a machine for their car buying experience.
Automation is definitely going to increase in the auto retail industry. Not just in the sales department either, but in service and parts also. It may be something similar to Tesla’s model where a customer test drives a car and completes paperwork at the dealership, the receives delivery direct from the factory. It may be an experience where the finance process looks vastly different.
At the core of automation for auto retail is the customer experience. What will enhance their in-store experience while simultaneously shortening the overall time spent in the store? If we look to the manufacturing sector and the wants and needs from car buyers, it’s clear – dealer employees aren’t going anywhere. But their roles are sure to change.
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