car-sales

The end of car sales?

In spite of changing customer expectations and new, resourceful challengers, many automotive retailers carry on, stuck in old ruts, towards the unavoidable tipping point.

A recent industry report (February 2021) from Accenture, highlighting three identifiable weaknesses, concludes that “traditional automotive sales models are at risk”.

  • Unsatisfying customer journey
  • Inconsistent prices and intra-brand competition
  • No direct access to customers.

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4 disruptive megatrends simultaneously at play

Four megatrends are currently revolutionizing the automotive business:

  • Electrification
  • Autonomous driving
  • Connectivity
  • The sharing economy.

Every single one of these trends is powerful by itself, but their combination is profoundly disruptive for the automotive industry.

According to the report, optimizing the sales model can reduce the cost of retail by up to 4 percent and create annual savings of more than 1 billion USD for a mid-sized sales region. “This can help OEMs stem some of the investments that are necessary to keep pace with the disruptive technological changes.”

But it’s not all about savings. New potentially lucrative opportunities are opening up in shared mobility and platform economies. And direct customer access is important for OEMs to master their transformation from retailer to mobility provider.

The fittest will survive

The authors urge the industry to make some fundamental changes: “If OEMs do not act fast, they risk losing 30 percent of revenue to new competitors by 2035.”

As the industry continues its transformation, OEMs must decide the future direction of their sales strategy. Should they:

  • fight to maintain the traditional (indirect) sales model?
  • team up with greenfield OEMs and third-party providers?
  • risk the transformation of their sales model from an indirect to an agent model?

Whichever road you choose, one conclusion is certain: There are some drastic changes ahead. And as always the fittest will survive.

While preparing for these strategic changes, a lot can be done in the short term to sharpen your sales and marketing performance, making your customers’ buying journeys as smooth, informative, and attractive as possible.

Learn more about the tipping point

Learn more about smooth, informative, and attractive car buying journeys

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