Yahoo Autos Car dealers fight the threat of extinction as the Teslafication of their industry intensifies
Car-buying isn't what it used to be, and buyers have all-new demands.
Auto dealers have to evolve to keep up.
Some dealers are doing costly showroom renovations; others are preparing for wider EV adoption.
Car-buying isn't what it used to be.
The modern car shopping experience, from initial research to final purchase, can now be done online — and the pandemic accelerated that shift. The dawn of electric cars is bringing another seismic shift that's threatening to eliminate dealerships altogether.
Auto dealers are now facing an existential crisis, and fighting to stay relevant.
Some are training staff to be EV experts as customer demand grows for electric cars. Others are emulating firms like Carvana and moving some parts of the buying process online. Dealers also are investing in expensive renovations, building features like lounges and dog parks to lure shoppers to their showrooms.
As they experiment with new strategies and customer perks, some dealers remain uncertain about what the future of selling cars will look like.
"When COVID first hit, nobody knew exactly what the new car business was going to look like," Scott Kunes, COO of Kunes Auto and RV Group in the Midwest, told Insider. "Same thing with EVs. We don't exactly know how the car business is going to look going forward with this EV shift, and how much the EV shift is actually going to take place."
One dealer hopes luxury perks and a dog park can lure shoppers
Porsche Fort Myers in Southwest Florida is undergoing construction on a new showroom and service center that will offer all sorts of luxury amenities, including indoor and outdoor event space, a full catering kitchen, lounges, workplaces, and even a mini dog park.
The new store is an example of how dealers are trying to improve the customer experience. CDK Global found the customer experience is five times more important to dealers this year than inventory and profits.
"We want to get away from that: 'I really don't want to go into a dealership,'" feeling among some buyers, Mitchell Sherwood, general manager at the Porsche store, told Insider.
Dealers are racing to stay relevant as EV startups try to prove they don't need dealerships.
Much like Tesla, Rivian and Lucid have physical storefronts, but transactions are done through a digital-only, direct-to-consumer model. The more traditional auto companies haven't yet gone that route, but they've hinted at it — despite the advantages of a dealer network.
But some industry experts say the dealership will never disappear entirely.
"I just don't see that dealership relationship and how the dealer interacts with the whole process of retail, period, changing too dramatically just because a few EV startups have had success doing it in a different way," Dave Thomas, CDK's director of content marketing, told Insider.
