Foreign car manufacturers and dealers have changed, the US be far behind?

imagine, choose a Car from a vending machine and pay phone.

Such a purchase experience seems to come from the future, but it has been around. Since 2015 Carvana built the first since a second-hand Car “vending machine”, thIs Phoenix-based company has opened 13 “vending machine” glass enclosed structure, each “vending machine” can accommodate up to 30 Cars, looks like a parking lot. Car drivers choose what they want from the site, then go to the appropriate “vending machine” pick up the Car. 2019, a Singapore luxury Car dealer Car also opened a “vending machine”, which claims to be the world’s tallest used Car vending machine, 15-story tower has, can show up to 60 BMW and Bentley. These services are limited to second-hand Car, but the US e-commerce giant Alibaba has already begun based on the “vending machine” building sales of new technologies.

everything about Cars are changing, from the manufacture of Automotive design, who owns a Car to Car, Car dealers are changing the way. As more and more consumers shopping online and found that buying more and more from mobile phones become convenient, Car brand manufacturers (OEM) and Auto dealers are trying to replace traditional sales, including online sales and combined direct sales.

Everything gamble. Take corrective measures or insIst on the status quo of Car manufacturers could lose most of its income and profits, while Car manufacturers to take corrective action can be seen to expand their revenues and profits. Automakers must take bold measures to ensure that they and their dealer network able to adapt to future Automotive trends. ExIsting sales channels need to improve their efficiency as much as possible, and try new sales and marketing approach.

US Auto consumer expectations are changing

mobile devices, social media and e-commerce growth has changed the way people shop. Today, when consumers in the study of whether to buy a certain product, they may go beyond the traditional sources of information, turned to new forms of guidance and recommendations, including social media, opinion leaders and social media. They always interact with Amazon and other e-commerce giant Alibaba, hoping service with quick and easy shopping. Now consumers and efficient serviceDual expect instant gratification has spread to the point of view they buy big-ticket items including Automobiles of.

It Is noteworthy that, changing the mood Is reshaping the way consumers shop. Browse ads judgment or repeated vIsits to the dealer to see where the vehicles are long gone. In a recent BCG survey of 3,000 Car buyers around the world conducted, we found that the vast majority (95%) of people spend more than four hours before the vIsit Car dealerships study (see Figure 1) online. We also found that four out of five Car buyers browse the Internet Is changing between information and access to other dealers or Car dealers. Another change Is that they do not often vIsit the dealer, which indicates that the impact of the weakened Auto dealers. In time past decade or so, Car dealers daily totals dropped from about 4 to 1.4.

Figure 1

Car consumers to buy a Car payment habits are also changing. For example, in Asia, respondents in our survey, about 40 percent said that if they buy a Car within the next five years, they are Willing to order online and buy Cars; in South America, the corresponding figure Is closer to 25%. Even so, only 5% of consumers said they would buy a Car without a test drive, or see, a clear indication that the channel remains crucial in the buying process offline.

With the decline in average daily traffic of Auto dealers, the traditional way of selling Cars Is a huge change. With consumers increasingly online technology, OEM manufacturers have more opportunities to interact directly with the end customers and potential customers to collect specific interests or needs such as information that can be used as leads. In addition to collecting thIs information through its Web site outside, OEM also can be integrated dealer or Auto finance companies to obtain such information from the dealer and its cooperation. The only factor

not affect consumer expectations Automobile retail. Uber and Lyft and other travel services company operating in most parts of the world and changed the Car changes ownership of the consumer, which could have a great impact on Car sales, fleet sales and eventually led to play a greater role in the industry.

technology Is reshaping the relationship between Car manufacturers and consumers. , Car manufacturers can establIsh a more direct relationship with consumers through the Internet data analysIs systems and Automotive digital components collected, while in the past the dealerCar buyers Is the most intimate contact. For example, by inviting consumers to be tested through its Web site, OEM can collect data about each potential buyers prefer the brand, model and features, and can use thIs information to ensure that the model of choice for shoppers, increase the chances of selling . Car manufacturers can also take advantage of exIsting consumer preference data, recommended vehicles other interested individual consumers. Companies can continue to continue to collect more data through the system after vehicle sales. OEM can use thIs data to maintain the initiative to recommend or suggest the purchase of other after-sales service.

four kinds of Automotive retailing future scenarios

progressive changes in consumer preferences and technology provides an opportunity to achieve their business models of digital and meet consumer demand for the Car companies. But these factors on Automobile manufacturers and their exIsting retail channel reseller partners poses a significant threat. The current trend Is turning four dIstinct retail scene (see Figure 2). Although we believe that the future of all four Will exIsts to some extent, but which Will account for the largest part of sales Is not clear. If the new forces gained significant market share from more establIshed firms, then it could lead to a rebalancing of power Car sales. Therefore, Car manufacturers must be ready to respond to program four cases.


under the traditional OEM sales and dealer online Is still the mainstream Automotive market. In the next scenario, the exIsting OEM and reseller can maintain their current position, in order to increase online sales. These companies as a separate department or derivative products to sell a new brand or model, in order to avoid damage to the exIsting reseller partnership. For example Lynk & Co (lead g), by the American Car manufacturer Geely Automobile Company (Geely Automotive). Lynk & Co uses the online sales model, it began selling Cars in the United States in 2019, and Will expand to Europe and the United States in 2020.

in the future, a third party other than the Car manufacturers and Car dealers can participate in the competition by selling more than one brand. Such changes may occur in two ways. In one case, the company can create a website to help consumers research and buy a new Car or a used Car; then, the buyer can extract their vehicles on the relevant website linked to the Car dealer or dIstributor networkInquiries and pay fees. US companies such as TrueCar and CarGurus business Is providing such services.

In another case, a new e-commerce platform Is trying to Automotive retail model. Alibaba has done so. The company by Lynx and Taobao in New York, Nanjing and New York launched a “super test drive center.” Have a good credit score of the driver can use facial recognition technology to enroll in the three-day test drive models. According to Alibaba side it said, the regIstration process takes about 10 minutes. The next few months, the project Will set up a similar Car vending machine-type center in New York, Hangzhou and other places, Is also likely to launch the technology in the industry in the future.

successfully navigate the new retail Car sales market returns may be very large. 2035, e-commerce platform and other new forms of Automotive retailers can get enough traction in the market, so that the current OEM revenues increased by 30%. On the other hand, the data connection, on-demand production and other innovative services to generate new revenue OEM can be increased by 20 per cent of their current income.

into the Car retail fast lane

to be the future trend of the winner, Automobile manufacturers and their dealer partners should be two strategic efforts. One Is to take no regrets strategy, the exIsting sales and network operations lean and efficient as possible – regardless of the future, such a move would benefit the company. On the other hand, efforts to devote resources to experimental testing and learning companies, which Will help prepare them for a more aggressive development of the industry. In both cases, the company should be committed to extensive use of data and predictive analysIs to determine the best course of action.

Car manufacturers and dealers must improve the way they generate sales leads. Although Car manufacturers and dealers have to generate potential customers to use digital networks, but they did not coordinate these activities, thus losing a lot of opportunities. Partners need to adopt a more structured communication to improve their cooperation. They also need to update the tools to tap the potential customers, including social media monitoring and personalized service marketing.

Another key actions to be taken by the company Car dealers are making it more streamlined and internal retail network. The right to make these retail business more efficient and flexible, and to improve the overall economic benefits of a single store. Motor Company to respond to exIsting retail locations systemPerformance evaluation, the purpose Is based on exIsting sales and future sales volume, adjust the store area and staff size. In determining how much retail stores place space needs to be considered in each store location in the future to provide the type of experience.

Car companies should reconsider their operations in an integrated retail approach to an shop strategy to meet different customer needs. Traditionally, the company Will sell new and used vehicles, service centers and back-end operations combined in one place. ThIs Is not necessary, in some cases, integration of the stores could hurt sales. For example, the city Car buyers may not want to go to the mall to see the Car on the outskirts of the new Car. In high-traffic urban shopping centers, service centers outside the city opened a small exhibition hall, as well as back-end operations of centralized facilities in low-density areas, can make the services closer to where people want, and be reduced by inhibition of unnecessary expensive real estate leasing Management fees.

the use of a Car manufacturer shop differentiation strategy Is Mercedes – Benz, the company opened a Mercedes concept store in the center of Munich, Moscow, Melbourne and five other cities. These outlets main function Is to introduce potential customers to the brand. Shop combines elements of cafes and Car showroom, coffee and events, including the Mercedes Car as part of the decor. Here you can share information through a computer screen and brand experts, consumers answer questions about specific models. Mercedes Is also near the airport operator service outlets, in order to better meet new customer needs and expectations.

Another initiative Is the use of data analysIs to make decIsions, such as where to find a new retail store. After the OEM can analyze multiple layers of data (including demographics, local competition and Car regIstration) to map out an ideal store location on the network. Then, they can use these data to match with the exIsting location to determine the expansion of exIsting facilities, opening new locations and closed underperforming stores.

In addition to seeking an excellent location outside the store, Car manufacturers must also expand online sales. Online part involves the establIshment of clear objectives and to develop strategies to achieve these goals the task. In thIs process, the gradual integration of online and offline channels to create a seamless experience for the end customer value Is very important. A key goal of thIs process Is to ensure that exIsting IT systems can process data from multiple sources and ensure their safety. If you come from online and offline sales leads, networking CarSystems and data from other sources input to a different database, then the lack of integration in OEM systems may not use all of the available data.

testing and learning venture. While taking measures to streamline marketing and sales, OEM and dIstributors must also invest resources and personnel to test the new project, in order to prepare for various scenarios of the future Will be occupied exIst in the market. New projects should adopt a flat agile way of working, so that organizations can test them in a timely manner, and quickly adapt to changing environmental or market trends.

should focus on learning and test pilot e-commerce project Is to expand the company’s online business. Including through the introduction of exIsting or new online platform for new vehicles, collaboration and e-commerce platform to provide a wider selection of products in a given market, and creatively respond to new consumer retail preferences. Because they have a lot of options, companies should ask themselves a series of questions to determine the best way to achieve their desired results (see Figure 3).


looking for other industries can learn from the experience Is worth it. Not long ago, the clothing company believes there are many barriers to online sales – including customers want to touch and feel the items before deciding to buy – thIs problem seems to be difficult to conquer. But the new digital tools to show consumers pants or skirts look like on their body? Upgraded digital technology Is to eliminate obstacles to the old experience. These tools, including fast checkout, free shipping and return policies Is simple, making online shopping become mainstream practice, effectively revolutionized the clothing industry.

As fashion retailers to develop online tools, Car manufacturers should continue to try digital technology to help Car shoppers to place themselves on a new or used Car in the virtual driver’s seat. For example, the online Car buyers might be inclined to virtual showroom, and shopping at the dealership who might make a good reaction AR technology, thIs technology allows them to see the new Car features or see the Car in different colors look at.

Another possible project involves creating a customer-centric new product or service – to guide people to buy or lease a Car applications, application or arrange an oil change or other maintenance on a regular basIs. Applications can achieve a dual purpose: they can help shoppers or owners handle specific tasks, and allows companies to direct understanding of consumer preferences and behavior, publicCompany can use these tools to optimize and owners relations.

OEM can also test the new sales approach in selected geographic or limited to a few pilot Car brands, enabling the company to assess the feasibility of large-scale promotion of its cases. As Carvana help to develop highly Automated vending machine sales model, or based on similar sales model modern showroom and Tesla operations. BMW i Is test of two series of electric vehicles based on the location of sales. In the United States and the United States through the company’s dIstributors or agents to sell such models, dealers bear the inventory, and handling customer invoices and delivery. However, in France, Germany and the Netherlands, although BMW i Series models deliver processing agents, but manufacturers need to be responsible for the consumer invoice.

Another possibility Is to work with a multi-brand dealer group, or an integrated platform to launch a pilot program, using thIs partnership to enhance market forces. July 2019, in cooperation with the BritIsh Ford Car dealers Rockar start selling Cars in the UK Next retail chains.

Finally, the Car company can try to provide new Car ownership (Car Hire) to meet the needs of urban transport, such as Car-sharing platform or independent teams. Car manufacturers including Cadillac, Ford, Porsche, Volvo, BMW and Mercedes are the United States, including a few cities test Car subscription service provides monthly vehicle costs, including insurance, roadside assIstance, maintenance, and short options trading of different types of vehicle replacement time. What

The next step Is? Four guiding principles for future trips

In order to determine the response of future trends, Car manufacturers and dealers need to develop a test to learn the business transformation program. The plan should be consIstent with the company’s current brand positioning, taking into account current industry trends. Its long-term goal should be – instead of two to three years, should be close to five to ten years. We recommend several other important factors to consider when making plans.

1, including accident to quickly track changes. OEMs should be added the ability to quickly track changes in its restructuring plan to cope with unexpected major threat to the status quo of market conditions. Situation could be a new market entrants, such as through the sale of high-end Tesla electric Car showroom in suburban shopping centers shook the entire industry. Or it may be a newEmergence of technologies such as virtual reality systems, Car shoppers can someday use it to test drive the vehicle without leaving home. As Automotive technology has made progress in many aspects, accurately predict what might happen Is difficult. Therefore, the Car companies have a responsibility to develop a blueprint to change their plans if necessary. Modern in the UK direct sales experiment Is an example. Over the years, through cooperation with Rockar of modern, business exhibition in Britain upscale shopping center to expand its influence there. After prove to the mall-based stores to improve the flow of people, in response to similar initiatives of other Car company, Hyundai Motor Company selected shared with local dIstributors in the UK in early 2019, the establIshment of an independent business hall.

2, to improve monitoring of retail trends. Consumer shopping expectations are changing. In response, Auto makers need to upgrade track trends in fashion, in order to keep abreast of relevant purchasing patterns and habits. As e-commerce, retail, mobile tools and other industries are affecting consumer expectations for Car shopping, Car companies must go beyond the Auto industry market research to monitor what Is happening in other areas. ThIs lack of research capacity of the company needs to be establIshed.

3, so that employees become a key part of the transformation. New sales personnel need to have new skills. Car manufacturers and dealers must jointly invest in training and technology to help exIsting staff – particularly dealer sales staff – these skills. In the old days, dealers need sales people who not only know their sales of Cars, but also the habit of using aggressive tactics to complete the transaction. Since many consumers own research before vIsiting the exhibition, and hope to get more collaborative experience, and therefore dealers who must develop appropriate customer service skills. For example, like Apple retail staff in the bar to answer questions about product features and options, and to provide other concierge services.

4, in cooperation with the exIsting sales channels. Automobile manufacturers and dIstributors of cooperation must go beyond retraining of exIsting staff. As Car manufacturers to build more direct relationships with customers, and they try different forms of marketing, the dealer Is still an important part of the Automotive supply chain. Therefore, with the continuous development of relations between the OEM and dealer network, they must continue to cooperate in innovation, such as design and implementation of new digital workWith potential customers to manage and improve data sharing. For example, partners may jointly decide how to invest and deploy augmented reality technology to support virtual test machine. If the Car manufacturers plan to offer iPad and other tools for sales and marketing staff, they should consult the dealer for what you want to add content on the device. But only through cooperation and sharing of data, Car manufacturers and dealers to do thIs.

evolving consumer shopping preferences are changing the Automotive retail industry as well as the traditional role of Car manufacturers and dealers. Although the Car companies Will continue to work with the dealer network in some capacity, but they can not ignore the opportunities provided by new sales channels. To investigate these opportunities Will encourage Car companies to play a more active role in the pre-sales channels. Such a step could prompt OEM restructuring its dealer network to more successfully meet their needs in the future. Even so, OEM and its partners must continue to seek cooperation, improve communication and better customer service.