Nearly every driver can tell you about the time they went to a car dealership and picked out their first vehicle. It is an extremely personal experience, and dealerships have a special, customer-facing role to play in the automotive value chain.
Dealerships have also been some of the most hard-hit automotive businesses due to the current crisis. With lockdowns in effect across much of the world, consumers are not flocking into show floors. Likewise, an uncertain economic picture is leading to drivers putting their car purchases on hold.
What steps can automotive dealerships take to successfully navigate this crisis? How can they embrace technology to become more resilient in the future? In this blog, we look at some strategies auto dealerships around the world have adopted to survive and prepare for recovery.
Dealerships are adapting
Since social distancing rules and lockdowns have gone into effect, many dealerships have had to rethink their businesses and customer delivery models.
Dealerships around the world are adapting to new guidelines. In the United States, some have closed general-public sales and are selling vehicles by appointments made over the phone or online. Dealers urge sales personnel and customers to appropriately social distance while transactions are completed. In China, staff are checking employees’ and customers’ temperatures before they are allowed onsite.
Others have adopted online marketplaces where customers can purchase vehicles. In Brazil, Renault, which had invested in the industry-leading K-commerce portal, allows customers to have a truly online buying experience. Not only can buyers select and customize a vehicle, they can apply for financing and set up transactions completely online. Such end-to-end dealership experiences neatly comply with some of the most stringent social distancing guidelines.
While much of their sales staff is unable to sell in-person, dealerships in Asia-Pacific are training workers to do so online. Livestreaming car sales presentations – a sales practice commonly associated with online fashion retail – has become very popular in China. These sessions have increased 15X since the start of the crisis.
While ambiguity over the sale of vehicles remains, governments have allowed dealerships to service customers and repair vehicles. To ensure that automotive workers are protected, one dealership in the United States is limiting the number of people that can work on the shop floor at one time to observe CDC guidelines. As testing becomes more widespread, such practices will continue to be adopted around the world.
The future of dealer servicing
The current crisis has accelerated several developments that will fundamentally transform the auto dealership experience. The rise of predictive maintenance and on-demand servicing are just two trends that can harden a dealership to survive future lockdowns.
Predictive maintenance is a discipline that seeks to accurately discern when a part will fail and act before it does. In this framework, sensor-derived data is aggregated and analyzed to find subtle correlations. These hints are rigorously examined to find signs of imminent part failure. Replacing parts before a failure saves customers costs over standard preventative-maintenance procedures.
When married with on-demand servicing, this could lead to a fundamental transformation in how vehicles are serviced. For example, a dealer and car owner could be alerted of an imminent failure from the predictive analytics suite. The owner could then schedule a representative from the dealership to pick up the vehicle. Thereafter, the dealership could replace the failing part, disinfect surfaces, and deliver the vehicle back to the owner. If the repair can be done outside of the shop, the dealer’s representative could simply do it at the owner’s residence. In this way, the vehicle never suffers a catastrophic failure and social distancing is maintained.
Do you have other ideas on how dealerships can prepare for the future? Let me know on Twitter at @mannepalliAswin.
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