The car trade of the future

The automotive trade is facing a decisive transformation: modern, cutting-edge technology - whether as a combustion engine, hybrid or purely electric car - must be sold in a new way. Digitalization in particular is having a huge impact on the way customers buy vehicles. According to the Institute for Automotive Economics, the number of car dealerships is expected to almost halve by 2030. Given these changes, the question arises: Does the analogue world of car buying still have a future?

DThe Internet is competing with traditional automobile sales – more than 90% of new car purchases begin on the Internet. It is therefore not surprising that car manufacturers are also experimenting with car sales. The Swedish-Chinese start-up “Polestar” is one of the pioneers: its electric cars are sold exclusively online. There are only a few stationary “spaces” that are used for test drives and for service advice. Electric car leader Tesla also relies on online sales and offers direct sales, where the configured car is delivered directly to your doorstep.

The trend in offerings is towards a reduced number of features, which makes it easier for customers to configure their dream vehicle. At the same time, the logistics of parts and vehicles are simplified.

Virtual reality will also play a role in the car trade of the future. The first contact between customers and cars will increasingly take place with VR glasses. In this way, customers can also carry out virtual test drives without visiting a physical dealer and configure their cars according to their individual wishes.

Digital transformation of the car trade

The growing competition from the Internet requires restructuring if the analogue car trade wants to keep up. Higher demands such as cost pressure and low returns are forcing large car chains to take over small independent dealers or convert them into branches. So-called “dealer alliances” are formed in which car dealers come together and build their own brand in order to become independent of manufacturers of different brands.

In order to keep up, one thing is particularly important: focusing on a customer-driven concept. Car dealerships have to become intermediaries and take care of customer acquisition, advice, test drives or purchase processing in new ways. But many retailers are afraid of new concepts.

It can also become problematic for dealers with their own workshops if electromobility ramps up. Because these vehicles require less maintenance and regular services such as oil changes are no longer necessary. Nevertheless, there will still be some physical dealers in the future who sell and install original spare parts and offer personal services. The immediate product experience also continues to play an important role when buying a car, especially for the older generation.

However, the situation is different for the younger generation, some of whom wonder whether it still makes sense to have a car and instead resort to public transport, bicycles and increasingly temporary sharing car offers. Against this background, a new approach to customers by the car trade is necessary.

Sell cars as a lifestyle product

Car manufacturers are closely monitoring these developments and are increasingly working on a D2C (“Direct to Customer”) orientation in order to better reach customers, especially the younger generation. Buying a car should be an experience. BMW, Mercedes-Benz, Porsche and Nio show how it's done with their own stores. They come to customers and present themselves, for example, at festivals or in city centers. It's not just a car that's being sold, but a complete lifestyle.

In summary, it can be said that the car trade as a whole is facing major upheavals. Opportunities only exist for those dealers who quickly adapt to the new requirements of car buyers. The Institute for the Automotive Industry's forecast for 2030, which assumes a reduction in car dealerships by almost half, shows that there will be a tough selection process in the coming years.