If the franchised dealer model does not evolve between now and 2030, dealers risk a decline in return on sales of between five and seven percentage points, which would drive every dealer in the country out of business.
Cristiano Carlutti, associate partner at McKinsey and Company, urged delegates at the Automotive Retail Congress to follow the lead of their manufacturer partners and prepare their business plans early for a future of connected mobility.
Carlutti, formerly a flagship development manager and vice-president of used sales for Fiat, and vice-president of sales and operation for Tesla in Europe, said retailers will lose key elements of the value chain if they fail to act.
“There are a lot of opportunities from digital sales and dealers’ embrace of apps to offer convenience to customers,” said Carlutti. “What we need to see more of is the dealers integrating more closely into the customers’ technology ecosystem.”
He described the technologies driving a potentially disruptive mobility sector – autonomous, electric, connected and shared technologies – as “completely intersected”, saying that “each acts as an enabler to the other”.
He added: “Connectivity is the enabler of almost everything else.”
Investment in these technologies over the past five years has been “amazing”, he said, with much coming from non-manufacturers.
“What we are going to see is a significant disruption of the market. It may be five years from now, but it will happen,” said Carlutti.
But he added that European consumers remain far more loyal to manufacturer brands than their Asian equivalents.
Carlutti said dealers needed to acknowledge this – and their role as the “number one deciding factor” in a car sale – when developing their own solution to the challenges posed by new mobility.
“Customers now want to have an experience which is easy, convenient and seamless, from online to offline, and they want the transparency they get elsewhere,” he said.
