Are Auto Dealers & The Franchise Business Model Dead Meat? (or at least Impossible Burgers)

THE SITUATION — AND THE KEY QUESTION;
Will the Failure to Adapt to Digital Vehicle Buying, Outmoded Franchise Laws,
& Millennial Customer Needs Dismantle Traditional Dealers Business Model?

Digital business models are working (e.g. Carvana ) and in a few dealerships.
Electric Vehicles being adopted and Autonomous Vehicles progressing.|
Consumer shifting to online buying and responding to Covid-19 disruptive changes.

SIGNIFICANCE:

SO: One or all three will quickly demolish traditional auto dealer business model.
In the next 5 years, the franchised dealer model will be changed by overwhelming pressure.
Franchises have been a protected species for a 100 years in its current regulated / lobbied form.

SO WHAT: Just like the vinyl record industry [ Kodak & Polaroid], maybe it is time.

SOLUTION: [What Dealers Can Do]
Top 10% of dealers talking about how to change & adapt.
Seeking what needs to done to come to grips with all these new things.
Discussing change management is a waste of time;
Dealers need to discuss how to adapt to an uncertain future where they will not have franchise protection.
Need to gather the industry leaders at or before NADA ASAP — and deal with this issue.
Have honest discussion about either truly adapting & listening to the customers OR– simply selling out soon.
Just like the railroads, the auto dealer’s biggest asset will be real estate.

SOURCES:

This Post is authored by Mike Pochan, Industry Entrepreneur and Analyst & Carnegie Mellon Faculty; m_pochan@yahoo.com

 See “The Unexpected Future of the Dealership” from AutoSuccess Magazine – https://www.autosuccessonline.com/the-unexpected-future-of-the-dealership/

FIGURE: The ‘Chasm’ of the Technology Adoption Curve will most likely swallow 2/3 of the Traditional Dealers.

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