Dick Potter ruminates on the future of car showrooms.
My life in cars. Indeed. Well, car life has been a whole lot less stressful these past few weeks, that’s for sure. Globally, car traffic has reportedly halved. For those of us that have continued going to work here, I’m sure you’ll agree with me. What a joy to drive with less traffic on the roads! No school runs, lots of people working from home, no non-essential travel… need I go on? Yet, despite my glee at having the roads, mostly, to myself, in line with most industries, COVID-19 brings scant glee to the motor industry.
The majority of car buyers – myself included – prefer to kick the tyres (gently!) and test drive their car of choice before buying it. The current social distancing restrictions – and, yes, for sure, finances are another factor – mean that many folks consider a trip to the car showroom off-limits right now.
But, if you wanted to buy a Tesla model during this time, you wouldn’t have to go to a showroom. See, unlike traditional dealerships, all Teslas are sold online and delivered to the customer’s doorstep. Their showrooms are limited and situated at high footfall places like shopping malls. The showroom isn’t there to close sales, but to display the product, latest technologies and answer any questions you might have - maybe, “when do I get a chance to kick that tyre?”
By removing franchise dealers from the buying process, Tesla saves money on dealer commissions, for starters! Unsurprisingly, they have shown increasing sales and reported less disruption to their sales supply, (so far) during COVID-19. This is in comparison to their competitors who depend on traditional dealerships. The success of the Tesla business model is likely behind a surge in dealers ramping up their websites to help buyers select their preferred set of wheels, sort out payments and complete that all-important paperwork. Apparently, Mercedes is planning on adopting a similar business model and aims to convert a quarter of sales online by 2025.
I wonder how this business model – removing the dealership from the equation – would fare in our neck of the woods? Apart from it being rather nice to wake up and find a new car outside your front door, there would be a lot less traffic on the Sitra causeway! In the likelihood I’ve set off a panic amid the dealerships up Sitra way, I hastily insert that I do have it in good stead that the vast majority of buyers, globally, will continue to use dealerships during the next decade.
Whilst traffic on the roads here may have decreased, there’ve been reports of traffic increase in other areas of our Isle of Paradise. The recent sighting of dolphins swimming through Amwaj lagoon anyone?! No doubt enjoying their quieter environment! I can’t say I was lucky enough to have witnessed it myself, but I saw footage of it. How heart-warming. Dolphins are not the only creatures enjoying the decrease in traffic though – there are reports of less wildlife mortality due to collisions with vehicles, for example, and an increase in reported birdsong! Perhaps, with less traffic about, it’s just that we can now hear them more clearly? I’ll leave you with that cheerful note all – and drive carefully if you do have to drive somewhere.
