In case you haven’t noticed brick and mortar stores are dying and you know why. Buying online is quicker, more convenient, and in the case of clothing: you purchase hasn’t been worn by other customers. So while consumer buying practices are seeing a major shift what’s the one thing that has stayed the same? Buying a car. You still have to go into a dealership and go through the whole disgusting, exhausting exercise. Everyone dreads it and the car companies know it. But lobbying at both the state and federal level as well as community involvement like food drives and sponsoring local sports such as Little League to keep dealerships entrenched. Everyone says they hate buying cars at dealerships. But now things are about to change.
The coronavirus is forcing dealerships into doing something it resisted for years
The coronavirus pandemic has shut down many businesses large and small. Auto dealerships have been hit hard from the closings. And, it has forced them into doing something they have resisted forever; setting up legit online buying.
Yes, Carvana and Tesla have nibbled around the edges of the online direct sales approach. But it’s mostly business as usual, or at least it was until businesses considered non-essential were ordered to shut down. At dealerships now only service and repair are allowed to stay open.
Today’s order by Michigan’s governor will be an eye-opener for franchise dealers
Today, in what could be the first major step toward getting out of the franchise nightmare of car buying Michigan has designated remote sales of vehicles as essential. According to Automotive News Michigan Governor Gretchen Whitmer’s order says, “Workers at motor vehicle dealerships who are necessary to facilitate remote and electronic sales or leases or to deliver motor vehicles to customers provided that showrooms remain closed to in-person traffic.”
As the only means to sell vehicles and on today’s order dealers are rapidly bolstering their somewhat crappy websites and sharpening their online sales skills. Before, most websites were little more than come-ons aiming mostly at getting you into their showroom. Then dealers would try to upsell you or at the very least give you the added warranty and car alarm spiel.
Online vehicle sales are needed “to get to work, procure food, medicine, and health care.”
“We thank Governor Whitmer for understanding the needs of the residents of Michigan,” the Michigan Automobile Dealers Association said in a statement. “New vehicle dealers sell ‘mobility’ and that is what Michiganders need today in order to get to work, procure food, medicine, and health care. This will allow us to help meet those needs.”
This could finally be the break many have hoped for. Especially, if buyers like the new approach. But honestly what’s not to like? Vehicle demos, valet-style pickup and delivery for test drives to oil changes, it would be a blessing.
“By the end of the year, 80-90% of dealers will have full e-commerce capability”
“This is going to fundamentally change how people view buying a car,” said Rhett Ricart, CEO Of Ricart Automotive Group in Ohio to Automotive News. He’s also chairman of the National Auto Dealers Association. “By the end of this year, you’re going to see 80-90% of US new car dealers with full e-commerce capability in their shops.”
Ricart’s online sales have doubled in the last month and a half. But he also says before dealers can go to complete online sales some laws will have to change. These deal mainly with the physical paperwork signature requirements. Once that hurdle is cleared dealers predict online sales will see sustained usage in the US. Finally!