Buying Cars in the Future

Last newsletter we gave our view on driverless cars which if you did not read it was that they would not grow as fast in Australia as speculated by some.

So if we are still buying drive it yourself cars (or even if they are driverless), how will it be done in ten years time?

The Consumer Factor

In order for us to imagine how we will be shopping for cars in the near future (if your an average consumer and you just bought a new car, this could be close to your next buying experience) lets first understand who the majority consumer will be in 5-10 years.

And the answer is....those who are teenagers and in their twenties now! And how do they see the world? Mostly through a phone but most definitely online.

They will represent an influential and large sector of the market and they will expect:

  • To be able to select and pay online
  • To be able to have the vehicle delivered to them (and quick)
  • To have a limitless selection

How will Dealerships change?

We have already seen a large decline in used car dealerships due to online shopping. The new car dealership has been largely resistant because of other services but with the new generations coming through that is all about to change.

There is more than one factor that will be driving this change:

  • Dealerships occupy large costly land spaces in expensive areas
  • Selling vehicles is becoming less profitable so costs must be cut
  • Consumers want more choice, easier selection and everything done for!

I recently read about an expert speaker talking to a group of car dealerships and he said that they do not have to worry because drones will never be delivering cars. We are not saying that drones will either but delivering the vehicle is the smallest of the problems dealerships face in the future.

The services offered by the dealership will need to change to offer tomorrows consumer what they want or bigger online retailers will force the change.

As a consumer, do we really care? Generally, as a consumer, we only care about how we buy a product if how means we can get a better price for less effort and the service improves. If that then means the decline of an industry and the loss of jobs and one on one service, it is proven we do not care, over and over again. We do think to ourselves that it is a shame, and the good old days were better but then we go and buy online from America (or other) because it is better for us as the individual.

So how will it change?

Before answering that we need to understand who is driving the change. One is the consumer and what they want and how. The other is the manufacturer. For those of you who don't know, dealerships are just franchise fronts for a manufacturer. The franchisor calls the shots and they decide where the industry will go into the future.

You can be the largest dealership owner in Australia but if your manufacturer (franchisor) wants to change you will have to change.

Car manufacturers work on a global playground. The global trend drives their process and what happens here in Australia has very little impact on their decision-making processes.

In the future one common method will be:

  • We will research our next car online (already do)
  • We will then request a test drive be brought to us at our convenience (can already do)
  • When we select we will order from the manufacturer's website at a set non-negotiable price and organise payment (finance or other and probably from the manufacturer's lender)
  • The manufacturer will organise a franchise near you to take delivery of the new car, prepare and deliver it to you.
  • Dealerships will be set up in cheaper locations regionally and will consist of advance servicing and preparation workshops.
  • Car salespeople will be a thing of the past and so will negotiations.
  • Finance will be done completely online by yourself.
  • Some of the manufacturers will do deals with big onliners like Amazon to provide sales, finance and ordering systems.


Will it be better?

Well if ordering online is better for you now, it will be better.

We won't have much choice over whether it changes or not, as market demands in total influence and drive change. You probably won't get the same bargains you can pick up now but someone will find a way to provide cheaper cars than everyone else I am sure.

Breakdowns, servicing and accidents will be handled faster by mobile units and incentives will be offered with certain brands of on the spot replacement vehicles etc.

It is a brave new world and if we are in the dealership or car sales business we will have to adapt and find new ways to do things.

*These are the opinions only of vehicle industry futurist Shane de Gelder who rights a blog site called


Car Buying

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