Self-Driving Cars are Coming, is Your Dealership Ready?

by Emerson McCuin on 2017-02-06 12:40pm

Auto Dealer Self-Driving Cars


Horse sense is the thing a horse has which keeps it from betting on people. -W.C. Fields

The first gasoline-powered, horseless carriage was made in 1886. Since then, roads have never been the same. Until the mid 1930’s, horses and horse-drawn carriages dominated the roadways. It took years before the average consumer could afford a horseless carriage, but with the advent of the assembly line and Ford's Model T, owning a car became cheaper than owning a horse. Soon, the automobile became king of the road, especially in cities where there was limited space for each person to own a private horse. Alternatively, in rural areas, horses remained in service on the roads for a number of years due to their utility on farms, as well as the availability of space and feed.

Needless to say, with the transition from horse to horsepower, industries supporting horse travel, such as stables and carriage building, suffered deep economic loss or disappeared altogether. Today, auto retailers are facing a similar disruption to their industry that has the potential to put them out to pasture.

If industry leaders are correct, by 2021, fully autonomous vehicles could be commonplace on U.S. roadways. Early adopters are likely to be commercial entities, focused on intra-city transit and freight moving. Uber, the ride-sharing giant who's already shaken up one automobile industry, is investing hundreds of millions of dollars into companies developing automated vehicles. The impact of ride-sharing companies like Uber owning large fleets of driverless vehicles could lower the price of the service to the point of where personally owned vehicles is no longer economically viable. For retail industries relying on people owning and driving their own vehicles, this could have a tremendous impact. These industries will need to adapt with the changing times, or find themselves left in the non-existent exhaust of driver-less electric vehicles.

The transition will take time, much like the transition from horse to automobile, and auto dealerships would do well to consider their new role in this cutting-edge market. Here are a few considerations for auto dealerships not only wanting to survive this disruption, but to strive within it.

Embrace Technology

In an age where the internet influences nearly every aspect of a person's life, dealerships need to keep up with the technology that consumers expect. This means having an up-to-date website, communicating through email and text, and finding ways to incorporate new technologies like virtual reality. Virtual test drive, anyone?

They must also continually find ways to make life easier for the consumer. Look at how Uber was able to dominate the taxi industry by providing an app that made it easy for riders to get picked up and pay by credit card, all without talking to anyone. Now imagine if there were such an app to order a vehicle test drive. With the push of a button, a consumer could schedule a test drive and have the vehicle dropped off at their home at a time that is convenient for them and test drive the vehicle in their own neighborhood.  

Focus on Used Cars

If the industry experts’ predictions are correct, many people will ditch their own car in favor of inexpensive and convenient services like Uber. This will create a huge stock of locally sourced used cars. These used cars can be purchased and resold to people unwilling or unable to take advantage of ride-sharing services. To fully take advantage, a dealership should streamline the process of both buying and selling these used vehicles. Make it easy for consumers by picking up and dropping off vehicles, provide free vehicle history reports on a simple website, and make the used vehicle buying process as transparent and hassle-free as possible.

Become Indispensable to Consumers

Wow customers with what you do. If you don't do this already, transition to a customer-first approach. Today's consumers are used to ordering things online and never speaking to salespeople. Some of this comes from a perception of salespeople as pesky, pushy, and not at all out for the consumer's interests. Part of Uber’s success comes from the consumer’s option to review a driver. This ensured that drivers provided the very best customer service to riders, often providing them with complimentary candy, information on tourist attractions, and other features to improve their experience.

Focus on Niche Markets

As with the transition from horse to horsepower in the early 1900’s, the transition to fully-autonomous vehicles won't happen overnight. There will be holdouts. Some people won't want to make the switch to autonomous vehicles. Maybe they fear the technology, or live in an area where an autonomous vehicle is not practical or available, or maybe they just like the act of driving themselves. Whatever the reason, this niche market will need to be served, and your dealership could fill this gap, even if you only have a Florida used car dealer license.

It’s hard to know what the impact of autonomous vehicles will be on the dealership, but change is certainly on the horizon. If you plan only for the month, the week, or the day, your dealership may not survive. The sooner a dealership prepares for changes, the better they’ll be able to ride to stay upright in the saddle when the road gets rough.