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Disruption – the New Reality in Automotive

Disruption – the New Reality in Automotive

July 23, 2020

By definition, disruption is rarely invited, and is almost always forced upon us unexpectedly. Usually it’s in the form of some kind of evolution that forces substantial change or innovation – but no established industry is likely ever prepared for disruption of the kind that has occurred as a result of COVID-19.

In the span of several months, the global pandemic has presented each and every one of us with new challenges, producing economic, political, and social disruptions many of us have never experienced. It’s changed the way we live and work – upending entire industries, including the automotive sector.

This new reality has changed, perhaps forever, the car buying experience – by hastening the transition of car dealerships into the digital landscape and resulting in a significant change to the way people approach purchasing a new vehicle. However, as many are already well accustomed to making purchases online, this new business model presents unique and exciting opportunities for prospective buyers.

In a business known for its personal interaction, the pandemic forced many dealerships to re-adjust their business models. As we have moved into late spring and early summer, more dealers moved to home delivery and virtual appointments – and there are many who would suggest home delivery, over time will become part of the new normal.
As the health and safety of our customers has always been a key foundational pillar of our industry, direct store-to-door services offer dealers a chance to connect with new customers virtually, thus providing the same stellar service they would find when they walk through our doors. It puts the buyer in the driver’s seat with transparent pricing and more options to browse and consider, all from the comfort of their homes. Those dealers who don’t adapt will be forced to play catch-up while much of the industry has already taken the necessary steps forward.

Mike Stollery, Chairman of our federal association, CADA, suggests the sector has “moved more in the last 10 weeks than we have in the past 10 years.” He also suggests, because customers are at home where they are relaxed, the car buying experience is less stressful. Buyers who may have previously felt some degree of apprehension can now enjoy the thrill of purchasing a new car in a way that suits their individual needs. And perhaps even in their pajamas.

In some jurisdictions, home deliveries have shot up from less than 5% of new-vehicle sales to nearly a quarter of all sales. Certainly this presents a challenge to dealerships who serve rural or more remote locations, but it’s a new reality we all need to adapt to.

In British Columbia, we have been fortunate to be guided by sound, strategic health care leadership – and it’s a credit to the people of this province who have to a large extent cooperated by following health guidelines and demonstrated patience during such a difficult period.

Today, signs of recovery are visible but with it there are also cautions about further turbulence given the volatile nature of the pandemic in many areas of the world. The ever-changing situation underscores the need for automotive companies and as a result, dealers, to remain nimble – while also remaining vigilant in ensuring sanitization and physical distancing are adhered to in their environment.

Obviously consumer confidence and the economy are inextricably linked, and both remain challenged, at least for the foreseeable future.

Through our collective efforts, I have no doubt that auto companies will emerge from this experience with a fresh set of ideas and a new outlook to carry into the future. Of course, in the coming months we’ll have a better idea of how this will look long term, but change is a part of life. And for our creative industry professionals, it’s one we’ll embrace with open arms going forward.

Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at bqualey@newcardealers.ca

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