Study: Dealers, consumers aligned on future car ownership
- Fewer personally owned vehicles
- Mobility not seen as a threat to dealer business
- Number of dealerships may decline
A new study by Cox Automotive found that dealers and their customers are closely aligned on how they see the future of car ownership and the acquisition process including such new wrinkles as car sharing and subscription services. Cox Automotive is the parent of Kelley Blue Book.
An interesting finding is that dealers are predicting a steeper decline in private ownership than the general public over the next five years, with 28 percent of the dealers believing in this change and only 18 percent of consumers seeing a decline in personal vehicles. The results were published in the second phase of a 2018 Cox Automotive Evolution of Mobility Study: A Dealer’s Perspective.
The study concluded that any wide scale transformation of the ownership model will be the result of consumer acceptance. Nearly half the dealers surveyed see consumers leasing or owning fewer vehicles per household over the next 10 years and 87-percent also believe that ride hailing will have the greatest growth. Nearly as many, 82 percent, see growth in car subscriptions, 81 percent see more car sharing
New Mobility: Opportunity knocks
While some predict this shift to new mobility models may be a threat to the traditional franchised dealer model with smaller margins and fewer sales, most dealers are upbeat on their prospects. A total of 45 percent said they see new opportunities to grow their business with new revenue streams by catering to ride-hailing and car-sharing providers, while offering subscription services to consumers.
About 75 percent see these shared car services are being ideally offered through dealerships and another 40 percent see mobility models as a way to appeal to a new set of customers. Three out of five dealers believe fixed operations like vehicle service and repair will become more important, since many of these shared and ride hailing vehicles will log more miles than privately owned cars and therefore will require more maintenance.
Dealers here to stay
“Dealers are approaching the evolving mobility landscape with their eyes wide open,” said Joe George, president of Cox Automotive Mobility. “While traditional car ownership isn’t going away anytime soon, we’re focused on enabling dealers with innovative consumer mobility and shared fleet service solutions to keep their businesses relevant.”
While the business model might change, 72 percent of the dealers surveyed believe this shift in mobility spells the end of the traditional dealership. However, there will be a consolidation of resources with 57 percent of the dealers indicating that there will be fewer franchises 10 years from now.