It’s never been easy to be a successful auto dealer. In addition to the usual challenges, dealers are increasingly faced with disruptive technologies including digital retailing, electrification, mobility services and (someday) autonomous vehicles.
In addition, dealers need to be aware of, and prepared for, the rollout of vehicle connectivity and the ways it will impact every aspect of their business.
The Basics
In 2021, more than 80% of all new vehicles will come with connectivity capabilities. Forecasts say that number will soon reach 100%. This means new vehicles can easily communicate data about the vehicle and its driver, and that many vehicles can receive remote commands and software updates.
Vehicle connections are exclusively routed through each OEM’s data center. While OEMs manage data and commands in accordance with their data policies and terms of use, dealers are essential in activating connected vehicles and realizing their full potential value – and so dealers should insist on OEM support for development of connected services designed to enhance dealer operations.
There are dozens of opportunities across all the departments of a dealership. Following is a sample with a focus on sales and F&I.
A Vision for Connected Sales and F&I
1. Ordering and Inventory:
New vehicles become connected at the factory. At “ignition on,” a data file is shared with the dealer, showing that all diagnostic tests have been passed. Dealers track all orders as they pass checkpoints from factory to dealer.
Dealers manage expectations with customers and prepare their lots for inventory arrival. Any incoming vehicles with diagnostic codes are flagged.
Dealers centrally check the location of any vehicle on the dealer’s lot. The dealer is notified if any vehicle moves or needs maintenance. Dealers leave keys in each vehicle, because all vehicles are centrally “locked down” and unable to start without authorization. Floorplan audits are completed remotely in minutes. Time is saved locating vehicles for demonstration and sale. Vehicles that have been in inventory too long are easily identified.
2. Demonstration and Sale:
Demonstration vehicles are selected using data from local online shoppers. Commonly searched vehicles are equipped with commonly searched accessories. Demo vehicles display an app with the dealer’s logo and a suggested test-drive route.
Vehicles greet the customer by name, using information sent by the sales representative. The demo app is synched to the drive and provides audio comments to highlight vehicle features.
Dealers manage demonstration vehicles through a booking application, tracking vehicle availability, location, miles and fuel or maintenance needs. If the vehicle does not return, it is located and recovered. Some dealers implement additional sales tools, such as after-hours test drives.
3. Finance and Insurance:
In F&I, customers are offered products that automatically adjust to the actual use of the vehicle. A connected lease lets customers earn rebates if they use fewer miles than scheduled. Customers earn credits for good maintenance practices.
Customers trending toward excess mileage can pre-purchase miles at a rate lower than the “over-miles” rate. The dealer may also offer connected insurance products which adjust based on mileage and driving behavior. Past-due customers receive in-vehicle reminders and repossessions are easily located and immobilized.
Customers can “sublease” their vehicles to offset their costs, as with an airbnb. Connected technology allows easy booking and tracking of vehicles by the vehicle owner. Dealers see additional revenues by providing vehicles for these services, and by providing pre- and post-rental maintenance.
4. Delivery and Post-Sale:
At delivery, the dealer ensures the vehicle is connected and customer consents are recorded. Customers are encouraged to automatically notify the dealer whenever the vehicle needs service. Preferred vehicle settings are pre-loaded via a software update.
The vehicle greets the customer by name and offers a feature demonstration. Customers can contact the dealer to ask about any features that cause confusion. The dealer addresses questions directly or offers to send a tutorial to the customer’s vehicle.
Conclusion
These illustrations offer a quick view of the benefits dealers should expect from connected cars. OEMs and dealers will have to work together to realize the full vision. And both will need to resolve questions of data “ownership” and policy issues such as warranty compensation for over-the-air repairs.
Connected-car data must be integrated with DMS, scheduling and online shopping systems. The goal is worth pursuing, because it will deliver better customer experiences and more efficient dealer operations.
Greg Ross (pictured above) is the Connected Vehicles Practice Lead at motormindz, a venture consultancy that advises and invests in new technology to strengthen the automotive ecosystem.
