Futuristic Strategy For Automotive Dealers

My team at Al Masaood Automobiles recently completed a six-month exercise aimed at developing the strategy for the upcoming term. The implementation of this strategy is expected to steer the dealership toward a fresh business direction that prioritizes innovation at its core and encourages a reevaluation of their business practices.

Undoubtedly, automotive dealerships will encounter comparable challenges in the future as they endeavor to stay abreast of the evolving demands of customers and shifting market trends.

One such challenge is the increasing demand for seamless online experiences, as customers now expect to be able to research, purchase, and service their vehicles through digital channels. Dealers must adapt their business models to provide a frictionless online experience while maintaining the personal touch that customers expect from traditional brick-and-mortar dealerships.

Another challenge is the shift in customer values, particularly among the younger generation. Unlike their predecessors, younger customers place less emphasis on car ownership and more value on usage. This trend toward usership is forcing dealers to explore alternative business models such as car-sharing and subscription-based services.

Furthermore, the declining environmental situation is pressuring the automotive industry to decarbonize and aim for net-zero emissions in the coming years.?

Legislation is also a significant challenge. With the changing rules surrounding privacy, data usage, and insurance, dealerships face pressure to comply with changing legislation. Failure to do so can result in legal and financial consequences and harm the dealership's reputation.

Major mobility challenges

?In recent years, there has been a growing recognition of major mobility challenges such as pollution, carbon emissions, and congestion. These problems have become increasingly pressing as urbanization and economic growth have led to a surge in the number of vehicles on the road.

According to the United Nations, the world's urban population is expected to grow from 4.2 billion in 2018 to 6.7 billion by 2050. This rapid urbanization has put significant pressure on transportation infrastructure, leading to increased traffic congestion and longer commute times.

Pollution from vehicles is a major concern for many cities worldwide. Exhaust emissions from vehicles contain harmful pollutants, such as nitrogen oxides and particulate matter, which have adverse effects on human health and the environment. In addition to the harmful effects on human health, carbon emissions from vehicles are also a significant contributor to climate change, which is one of the most pressing global issues of our time.

Congestion is another major problem facing many cities, with traffic jams leading to increased travel times and increased stress levels for commuters which increases the likelihood of accidents and fatalities on the roads.?

The shifting scene

China is slowly but surely dominating the global automotive market. In recent years, the Chinese automotive industry has seen tremendous growth, with sales figures surpassing those of traditional leaders such as the United States and Japan.?

According to the China Association of Automobile Manufacturers (CAAM), China produced 25.72 million vehicles in 2020, accounting for over 30% of global vehicle production. Additionally, China sold 25.31 million vehicles in the same year, making it the world's largest automotive market for the twelfth consecutive year.

One of the key factors contributing to China's dominance in the automotive market is China's investment in electric vehicle (EV) technology. China is currently the world's largest EV market, with sales figures that dwarf those of other countries. This is due in part to government subsidies that make EVs more affordable for Chinese customers. Additionally, Chinese automakers are investing heavily in EV technology, with many launching their own EV brands.

Today, Chinese automakers are increasingly expanding their operations overseas, with investments in markets such as Europe and Africa. This trend is expected to continue in the coming years, with China projected to become the largest automotive market in the world.

Strategizing for the future

While the future of the automotive industry is full of challenges, it also has opportunities. Dealers who can adapt and innovate to meet these challenges will be well-positioned to thrive in the years to come.

As such, dealers cannot only compete with one another. To be successful in today's mobility industry, they must come together and work towards a common goal with transparency and purpose. By collaborating, dealers can pool resources and expertise to address industry-wide issues, such as the need for multimodal platforms that integrate different modes of transportation.

Dealers should also seek to join forces with new entrants in the market. For example, partnering with mobility aggregators or offering their services on multimodal platforms can help dealers innovate, add value for customers, reach new customers, and expand their business. By partnering with companies that specialize in areas such as mobility data analysis or digital platforms, dealers can stay up to date with the latest industry trends and offer more effective solutions to their customers.

To keep younger audiences locked in, dealers must also focus on innovation. This could involve offering new services, such as subscription models for car ownership or integrating the latest technology into their vehicles. This way, dealers can attract and retain younger customers who are looking for innovative and sustainable mobility solutions.

Finally, dealers should focus more on after-sales and adding value for customers. Maintaining customer satisfaction through agency services and facilitating a smooth customer journey is of utmost importance. When customers visit a dealership, they expect a high level of service and support, and it is essential to meet or exceed those expectations.

A dealership can achieve this by offering comprehensive aftersales services such as maintenance, repairs, and customer support. Additionally, a dealership should focus on creating a hassle-free customer journey, from the moment a customer enters the showroom to the time they drive their newly purchased vehicle off the lot. This includes offering personalized service, transparent pricing, and timely communication at every touch point.

By prioritizing customer satisfaction and providing a seamless experience, dealerships can build a loyal customer base and differentiate themselves from their competitors. In today's highly competitive market, maintaining customer satisfaction is critical to the long-term success of any dealership.

Conclusion

It is no secret that dealerships are facing significant challenges. However, in the face of these obstacles, dealerships must continue to innovate and find new ways to succeed.

?By continually adapting and improving, dealerships can overcome challenges and thrive in the face of uncertainty.