Car Dealers and workshops must reinvent themselves or will disappear

Electromobility is coming faster and more comprehensively than previously thought. Experts have revised their forecasts in 2017 in favor of a faster introduction of EVs. The vision of electromobility has been aggressively promoted by car manufacturers like never. And the subject of ‘autonomous driving’ was and still is at the top of the agenda. In as little as ten to fifteen years, the dominance of motorized individual traffic and the internal combustion engine could come to an end. Fleets of autonomously driving electric vehicles will then increasingly determine the street scene (Mobility-as-a-Service). Coupled with autonomous driving, electromobility is developing its truly disruptive potential. (More on the Disruption of the Automotive Market: The A and E of Future Mobility)

What does it mean for dealers and workshops if a large part of the added value in the mobility sector will be achieved differently in the future?

Dealers and workshops lose the end customer

Today, Internet commerce in particular is putting pressure on the classic car trade. As the number of new cars sold online increases, so does the number of dealers. At the same time, the car dealerships are getting bigger: Increasingly high investments in the presentation space are necessary to be able to offer customers a real experience. The consolidation process in the automotive trade will continue in the coming years.

However, a much bigger threat comes from the complete reorganization of mobility to a service model. A recent study predicts that by as early as 2030, 95 percent of miles traveled in the US could be substituted by a transport-as-a-service model, with significantly fewer vehicles. However, when fewer and fewer private individuals buy a car and manufacturers and mobility service providers cooperate directly with each other, the vast majority of dealers are threatened with extinction.

At first glance, the outlook for the workshops is bleak, too: Despite the significantly higher capacity utilization of the vehicles in autonomous fleet systems, the maintenance and repair costs will decline due to the lower number of vehicles and significantly lower accident numbers. In addition, the vehicles will be less susceptible to maintenance and repair due to electrification. The repair shops are threatened by a massive decline in employment due to electric mobility alone. Today’s vehicle owners are the mobility users of tomorrow – they will no longer be customers of the garages.

What opportunities does the reorganization of the mobility market entail?

When markets change radically, there are always losers and winners. The winners will be those who orient their business model early to the new reality. Every company must clearly develop its own vision for this future. This vision should inspire customers, employees and owners alike. And it should be future proof against trends and market changes. A strong vision is the best management tool to successfully lead the organization into the new era.

In our Market Foresight Future Car Sales & Services. Wie der Wandel des Mobilitätsmarktes das Geschäft für Händler und Werkstätten verändern wird(available in German only) we have developed six opportunities as examples, to open perspectives for new strategic options. Two of these opportunities are possible strategic options for a future in which mobility is radically dominated by Mobility-as-a-Service models:

1. Car dealers become mobility providers

Mobility services will increasingly replace the demand for cars in the future. Car dealers can benefit from this if they change their role and position themselves as mobility service providers. They must prove to be highly agile, because over time, different service models are likely to be in demand – from rental and car sharing to robocabs. In the long term, dealers can cooperate with car brands and public transport operators and offer services around fleets of networked autonomous electric vehicles.

2. Garages become Robocab Service Stations

With the spread of autonomous driving, garages must evolve into branded service centers. For this they should cooperate with manufacturers and fleet operators who do not necessarily have to be today’s brand leaders. In addition to providing operations, providing the charging infrastructure and cleaning and maintaining the fleets, they are also responsible for IT and the provision of additional data-based services (cloud services, infotainment, payment solutions, etc.). Garages will need to push their portfolio of physical services, such as maintenance and repairs, more towards intangible services to stay competitive.

Car dealers must develop a clear mission and vision

The future for dealers is extremely uncertain. They will only survive if they reinvent themselves and define their positioning and vision for the future. The reorientation of the business is mandatory for those who want to succeed in the market. In this the should align the external trends (digitization, new business models, automated electric driving, etc.) with the individual strengths.

You can download the White Paper How to survive the mobility disruption: 6 strategy archetypes and 8 tactical moves if your business is threatened by the next era of mobility here for free.

Your Contact
Enno Däneke

Enno Däneke is looking forward to your feedback!

Contact now!

    Fields marked with * are mandatory