ATLANTA — Auto dealers and consumers are more closely aligned on the future of mobility than many industry experts might imagine with both expecting significant reductions in personal vehicle ownership, according to new research from Cox Automotive.
In fact, analysts said, dealers are predicting an even sharper decline in ownership than consumers in the next five years (28% versus 18%). However, while most of the dealers surveyed appeared to recognize this eventual reality, only one in 10 see mobility as a threat to their current business, according to the second phase of the 2018 Cox Automotive Evolution of Mobility Study: “A Dealer’s Perspective.”
In the latest chapter of Cox Automotive’s three-part study series, an online survey was conducted with 430 franchised and independent automotive dealers in the U.S. The first phase of the Cox Automotive Evolution of Mobility Study, released in August 2018, focused on consumer perceptions of Alternative Ownership and Autonomous Vehicles. Among the findings:
• Strong growth is expected in alternatives to traditional ownership. Like any industry undergoing transformation, consumer acceptance over time is often the key driver. While still in its infancy, mobility is no different. In the next 10 years, nearly half (47%) of dealers see consumers owning or leasing fewer vehicles per household as a direct result of the increasing number of mobility options and the introduction of autonomous vehicles to the mass market.
Ride-hailing (87%) is predicted by dealers to see the most growth, followed by car subscriptions (82%), car-sharing (81%) and autonomous vehicles (81%).
• New forms of mobility are seen as an opportunity, not a threat. With dealers challenged by declining new-car sales and margin compression, 45% say they see new shared mobility models, such as ride-hailing, car-sharing and car subscriptions, as new revenue streams. Three out of four dealers see a benefit in offering these shared services at their dealerships, with 40% viewing mobility as an opportunity to appeal to a new consumer base. More than half (59%) also believe fixed operations will play a more important role with vehicles used for ride-hailing and car-sharing logging more miles and requiring more service.
Any hesitancies by the dealers surveyed toward these new mobility solutions are due to the uncertainty surrounding operations rather than rejection of the models themselves. This includes knowledge of how to set these services up, outside support to get these services off the ground and the overall cost benefit.
“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.”
• The current dealership model will change, but it won’t go away. Even with the shift from traditional ownership to usage and a more personalized “one-to-many” design of on-demand transportation, 72% of dealers do not view these mobility trends as the end of the dealership model. However, they do believe the number of dealerships in operation will be impacted, with 57% of the dealers surveyed saying there will be a need for fewer dealerships 10 years from now.
Originally posted on F&I and Showroom