Page 9 - GIADA july2020

Then, GM concluded that the buying More recently, electric and autonomous or become extinct, they caution. I wonder
public would prefer fixed-price selling. vehicles, as well as ride sharing, have come if these are the same armchair experts
Dealers would need to adapt to the Saturn to the forefront, only to be relegated to who warned franchised dealers about
business model or fail. They didn’t adapt the background as consumers continue subcompact cars, the internet, factory-
and they didn’t fail. Saturn did. to stay the course within the traditional owned stores, fixed-price selling, reduced
culture of two cars in every driveway (both dealer footprint, factory-direct selling,
In 2009, I found myself in the role of co- with combustion engines, thank you very electric vehicles, and ride sharing.
lead counsel in the Chrysler bankruptcy much). It is still early, but electric vehicles
proceedings, representing many of the 789 don’t seem to have that “vroom” quality, After COVID-19 ends and becomes a
rejected dealers. I cross-examined every self- that appeals to consumers. horrific memory, life will go on. In my
proclaimed expert from Harvard and Yale opinion, complete remote-selling will not
who posited how increasingly fewer dealers By now, you can guess where this is going. be embraced by the majority of the public.
were necessary to save Chrysler. Fast-forward Franchised dealers have successfully To the contrary, I predict “end-to-end”
11 years, and those theories have been proven emerged from game-changing events and online selling will be utilized by only 5-10%
wrong, as more than 400 dealers have been crises, and the business model has remained of consumers, and even less if talented
added to Chrysler’s network. substantially intact, the predictions of salespeople convert these customers to
industry mavericks notwithstanding. hybrid online buyers. It is impersonal in an
The next death knell, according to the interpersonal world. The purchase of the
disrupters, was the factory-direct-selling Of course, no one predicted or advocated family vehicle does not lend itself entirely to
model of Tesla, which would surely for the COVID-19 pandemic. However, remote interaction. The process is not that
eviscerate the franchise system. These the firestorm rages over how it will sterile. The human senses come into play
industry outsiders mused that the general revolutionize selling. Dealers are being with respect to test drives, color choices,
public had no use for local dealers. deluged with marketing advice and comfort, and the need to understand
How wrong they were. Recently, Tesla solicitations from vendors, along with financial options. Innovators and vendors
vacillated over whether to shutter all of invitations to webinars that promote and will resist the notion that customers will
its “galleries.” Moreover, since Tesla came facilitate remote digital selling. Virtual test continue to prefer to visit the dealership
on the scene, the number of traditional drives and home deliveries are the flavor and become comfortable with the product,
franchised dealerships actually increased. of the month. Adapt to the “new norm” Continued on next page

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