Have dealers come to terms with possible decline in car ownership?

Eyes wide open.

Auto dealers generally have come to terms with the idea that individual car ownership will decline over the next five years as other forms of mobility gain in popularity.

Cox Automotive’s “Evolution of Mobility Study: A Dealer’s Perspective” found that 28 percent of franchise and independent automotive dealers expect a sharp decline in individual car ownership, more than the 18 percent of consumers who anticipate that same decline.

120418 IL Have dealers come to terms with possible decline in car ownership

“However, while most of the dealers surveyed recognize this eventual reality, only one in 10 dealers see mobility [alternatives] as a threat to their current business,” Cox reported

“In the next 10 years, nearly half (47 percent) of dealers see consumers owning or leasing fewer vehicles per household as a direct result of the increasing number of mobility options and the introduction of autonomous vehicles to the mass market.”

What dealers expect

Dealers expect the most growth to occur in ride-hailing (87 percent), followed by car subscriptions (82 percent), car-sharing (81 percent) and autonomous vehicles (81 percent), according to the study.

“With dealers challenged by declining new-car sales and margin compression, 45 percent say they see new shared-mobility models … as new revenue streams,” Cox reports. “Three out of four dealers see a benefit in offering these shared services at their dealerships, with 40 percent viewing mobility [alternatives] as an opportunity to appeal to a new consumer base.”

Fixed operations opportunity

Nearly six in 10 dealers surveyed also believe fixed operations will play a more important role with vehicles used for ride-hailing and car-sharing logging more miles and requiring more service, Cox said.

“Dealers are approaching the evolving mobility landscape with their eyes wide open,” said Joe George, president of Cox Automotive Mobility. While “traditional car ownership isn’t going away anytime soon,” the automotive research and information company expects dealers with innovative consumer mobility and fleet service solutions to keep their businesses relevant into the future.

Dealerships won’t disappear

“Even with the shift moving from traditional ownership to usage and a more personalized ‘one-to-many’ design of on-demand transportation, 72 percent of dealers do not view these mobility trends as the end of the dealership model,” according to the Cox report.

However 57 percent of dealers surveyed believe there will be a need for fewer dealerships in 10 years.

Conducted by Vital Findings for Cox Automotive, the Evolution of Mobility Study included an online survey of 430 automotive dealers in the United States during July 2018.

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