As the trend of buying cars online grows, the continued presence of physical retailers will always play a crucial role. That’s the view of Polestar UK CEO Jonathan Goodman at today’s Autocar Business seminar on the car sales agency model.
Goodman said: “The automotive sector is going to move online. This does not mean purely online. There will always be a need to interact with a physical property.”
He continued: “If anyone doesn’t believe this is happening online, they are living in the dark ages. Everyone in the business must be ready to go online or they will be left behind.
“The big question for the industry is how do we marry the two? We need to enable retailers to deliver exceptional customer service while providing direct brand interaction elsewhere. That’s the challenge for the industry.
Goodman predicts that the significant footprint of today’s dealerships will not be as relevant in the future. “Do we need the same size of showrooms that are built across the country? I think we will see that gradually diminish.
Tony Whitehorn, automotive consultant at Endiva who has worked for Hyundai and Toyota before, said: “Some manufacturers are starting to push it – Stellantis and Mercedes, for example – and others are waiting to see. In the end, it’s what the customer wants.It will be something along the lines of a direct model enabled online but with a localized facility for that face-to-face interaction.
Goodman, Whitehorn and the seminar’s third speaker, Lookers COO Duncan McPhee, said the agency model – in which a car has a fixed price and a customer places an order directly with a car manufacturer (often online) , which then provides a fixed commission to the relevant local retailer – is a positive measure for customers in terms of price.
McPhee said: “The agency model keeps everyone honest and on their toes and clients will benefit massively. It’s good for customers, rather than bad for customers.
Goodman added, “If consumers feel like you’re overpricing your cars, they’re voting with their feet. [This model] allows you to keep some of the profit that would have been traded. Customers know it’s an honest price. You don’t go to other stores in other industries and start haggling over the price of a handbag or a suit.”
He added: “It irritated me as an industry enormously that we were spending £250-300m developing a new car and then starting to scale it down as soon as it hits the market. I don’t think the customer ends up paying more for it. This allows us and the retailers to make a profit while allowing the customer to get a fair price for a car. »