Car Salesmen are Living on Borrowed Time
VW is about to start selling cars online, triggering the eventual extinction of dealershipsby Robert Moore, on
You can buy just about anything online these days including things like computers, firearms, food, and car parts. And, as sure as the sky is blue, it was inevitable that we would eventually be able to buy cars online too. Well, Volkswagen is looking to take that big first step in online car sales as it plans to cut down its dealer footprint in Europe and increase average dealer returns by as much as a whole percent.
So far little is known about the situation, but since the Dieselgate scandal, Volkswagen Automotive Group has been doing its best to cut down costs across all 12 of its brands. Ideally, the group’s new “future sales model” will increase profitability and efficiency of its dealer network by some 10 percent which, along with trimming costs, will allow higher returns to each distributor. For now, this move is limited to European dealerships and chances are that once the online portal – which is being developed through a collaboration between VAG and its distributor – is complete a number of dealerships will eventually be axed. But, if VW is looking to increase profitability and efficiency by 10 percent, one couldn’t be blamed for assuming that VW would cut down 10 percent of its distributor network. That could mean as many as 300 dealers across Europe will close their doors as online purchasing begins to increase.
Apparently, Volkswagen has gotten its hands on some new IT equipment as well, as the group is claiming that its use could cut the time needed to service cars by as much as 70 percent. With each dealer employing an average of around 35 employees each, a few of job loss could be looming, but VW is confident that it can cut its workforce down by at least four in each dealer, who will then be assigned somewhere else. Rumor has it that the birth of a new dealer contract in 2018 will include a clause that allows dealers to dictate their own workforce, and as such, the trimming of staff will fall on each dealership individually.
Now, the question is, will this online portal actually be used by those looking to buy a car, and if it is successful, can it work around the world? Keep reading to hear more about it.
Dealerships be Gone
I’m imaging a world where the technology like the internet and artificial reality will completely replace the car dealership altogether
I’m imaging a world where the technology like the internet and artificial reality will completely replace the car dealership altogether. Ready for a new car? Just sit down at the computer, throw on your headset, and navigate to your favorite brand’s online showroom. With high-end graphics and technology that allows you to feel, taste, and sense what’s going on in the virtual world, you can take a virtual test drive, scope the car out, and enjoy it all right from your home office or even your bed. We might not be there quite yet, but they do have a technology that allows you to send tastes over the internet, and some high-end AR kits do include some form of sense displacement for realism. So, it’s only a matter of time really.
With the way we all naturally go online to buy anything, it’s almost guaranteed that online car buying will be a big hit. No dealing with salesmen, no gimmicks or nonsense, and the car can be delivered right to your driveway in a matter of hours if you’re close enough to a distribution facility. And, in time, manufacturers could even include trade in options that allow you to photograph your vehicle and take your trade-in deduction right on the spot.
Unless manufacturers really want to be greedy, they could even drop prices and still maintain the same profitability
On top of that, unless manufacturers really want to be greedy (I wouldn’t be surprised if they will be) they could even drop prices and still maintain the same profitability – no dealer means no overhead costs for a sales front outside of the people that keep the current websites going anyway. No dealer also means no salesman to take commissions, no bonuses, and ultimately a lower price for us, hopefully. Can it work in the U.S.? it’s hard to say, but it wouldn’t surprise me. We’re even lazier than the folks across the drink so I’m sure we’d certainly love to take advantage of online car buying.
What do you think? Would you buy a car and complete the entire process online? Let me know in the comments section below.
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