How Auto Dealers View the Evolution of Mobility

Cars and Drivers

Published: October 22, 2018 1:20 pm

Last Updated: January 11, 2020 4:03 pm

A recent study by Cox Auto found auto dealers and consumers are more closely aligned on the future of mobility than many industry experts might have believed previously. With the advent of autonomous driving and more ridesharing apps, it makes sense that consumers are becoming less dependent on owning vehicles. In fact, this study showed that both dealers and consumers are predicting reductions in personal vehicle ownership over the coming years.

Dealers, in fact, are predicting even sharper declines in ownership and a reduction in the number of dealerships. At the same time, auto dealers remain optimistic. While 57% believe there will be fewer dealerships in the future, 72% of dealer disagree with the statement, “Dealers may eventually not be needed.”

In the next 10 years, nearly half (47%) of dealers see consumers owning or leasing fewer vehicles per household as a direct result of the increasing number of mobility options and the introduction of autonomous vehicles to the mass market. Ride-hailing (87%) is predicted by dealers to see the most growth, followed by car subscriptions (82%), car-sharing (81%) and autonomous vehicles (81%).

Although dealers are expected to be challenged by declining new-car sales and margin compression, 45% say they see new shared mobility models, such as ride-hailing, car-sharing and car subscriptions, as new revenue streams.

Three out of four dealers see a benefit in offering these shared services at their dealerships, with 40% viewing mobility as an opportunity to appeal to a new consumer base. Nearly three in five dealers (59%) also believe fixed operations will play a more important role with vehicles used for ride-hailing and car-sharing logging more miles and requiring more service.

Michelle Krebs, executive analyst at Autotrader, commented:

American car dealers are a resilient, adaptable and optimistic group. They’ve rode out roller-coaster economies, endured a constantly evolving business, even the demise of brands they represent. They routinely take risks, regularly embracing new franchises and opportunities when they become available. Successful dealers likely view the world of new mobility through this same lens—they see opportunity to serve customers in new ways.

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