Automakers Should Take Dealers Along on the Self-Driving Journey

Auto dealers can be a key partner and competitive advantage to manufacturers, whether vehicle brands, as we know them, survive.

John Possumato

February 24, 2017

2 Min Read
Automakers Should Take Dealers Along on the Self-Driving Journey

Was I the only one concerned upon reading an article about how Ford Chairman Bill Ford sees the future of the auto industry?

In the story, Henry Ford’s great grandson says brand image translates into sales and owner loyalty, but then wonders if automotive brands could become irrelevant in an impending world of self-driving vehicles.

It raises fundamental questions about how automakers evolve their business models to survive, never mind thrive, in the not-too-distant future.

The article quotes Ford as saying, “This is an arms race,” when referring to the automaker establishing a Silicon Valley presence to try to get in front of the coming transportation revolution and repositioning itself as a mobility company rather than just an auto manufacturer.

Most major car companies, including Ford, plan to start rolling out self-driving vehicles by the beginning of the coming decade, while ride-sharing services such as Uber and Lyft are expected to continue gaining ground, especially when they can start deploying fleets of completely driverless vehicles.

Here’s my elephant-in-the-room question for all of the OEMs rushing headfirst into autonomous vehicles, ride-sharing partnerships and the like.

If Bill Ford is correct and brands become less relevant, where does that leave the auto-retailing industry?

I would like to know what the manufacturers see as and plan for the future for their retail partners in the age of autonomous driving and commoditization.

As the OEMs move forward to become mobility companies, capitalizing on the higher profit margins in software vs. manufacturing as a way to offset the lowest margins of the hardware commodity, will retailers be instrumental in this and share in the benefits?

While the Teslas of the world see a negligible role for the automotive retailer on the sales side of the equation, I haven’t heard anything on how the traditional manufacturers see where the retailer fits in the potential new world of vehicles, a world where brand isn’t particularly important.

How will these mobility initiatives potentially integrate with or correspond to the growth and development of their retail networks.

This future will be an arms race, as Bill Ford suggests. I’m in line with that. As I’ve said before, auto dealers can be a key partner and competitive advantage to manufacturers, whether vehicle brands, as we know them, survive. 

If my experience in this business has taught me anything, it is that dealers are a resilient lot, the ultimate entrepreneurs (and were so, long before that word became popular and aspirational). 

If brought aboard early in this new OEM vision of mobility, dealers will add to the value. I’m hoping automakers see it that way, too.

John Possumato heads Automotive Mobile Solutions. He can be reached at [email protected] and 856-577-2763.

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About the Author(s)

John Possumato

John F. Possumato is the CEO of DriveItAway Holdings Inc. (OTC: DWAY), an app/platform to facilitate dealer-based consumer vehicle subscription and micro-lease to ownership models.

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