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Dealers are still missing from mobility conversation

Projections about autonomous vehicles and shared vehicle use are pervasive. In some forecasts, houses will not need driveways or garages because networks of on-demand self-driving vehicles will whisk us away whenever we want.

 

One study posits that cost advantages of vehicle sharing over private ownership in North America will be so great that "mobility as a service" will account for 95 percent of the passenger miles driven within just 10 years. Such a future has vehicle sales, sales taxes and gasoline and diesel use plummeting as cities seek safer, less congested ways to move people.

 

Players inside and outside the auto industry are pairing up. Waymo and Avis Budget Group just agreed to work together as a network for self-driving fleet management. Networks of other companies are forming to discover consumer and vehicle performance patterns.

 

Data management and consumer behavior tracking companies are adding partners to gather user and vehicle information. Ultimately, they will sell these insights to any entity, from infotainment providers to government transportation authorities, to fuel the emerging ecosystem of mobility options.

 

Missing from these forecasts is what role, if any, dealerships will have. The waves of customer and vehicle use data from ride sharing reveals that very different customer relationships are likely to form.

 

The automotive distribution system is changing from one of moving physical goods to an ecosystem organized around ways to predict customer behavior and needs. Dealers have always wanted a 360-degree view of customer behavior.

New ways to buy transportation services means new behavior patterns. Companies are building those analytic engines using new digital tracking and social media sources. Becoming a part of the new data ecosystem will be vital for dealerships if they want to participate in new profit centers generated by data insights.

 

But today's dealerships are only lightly connected to these growing data streams. And even when connected, they are not positioned to benefit from the data.

A consumer-centric mobility future will also be a data-centric one that goes beyond dealerships' transaction data and information. Dealership-generated transaction insights are only a partial view as mobility choices increase. Dealers will need to have the broadest possible view of user behavior.

 

Why? A typical vehicle will soon generate and transmit about 4,000 gigabytes of data per hour of operation. Leveraging and monetizing what the data say about lifestyle, preferences and schedules must link to dealerships. Dealers need access and predictive analytics from those data from every partner including automakers, third-party service providers and, of course, government entities.

Thus there will be three additional large data pools of special interest to dealers and their distributors:

 

1. Vehicle-to-vehicle communications.

2. Vehicle-to-infrastructure data.

3.​ Cloud storage from analytic companies.

 

Will dealerships benefit when vehicles are increasingly self-diagnostic because of onboard telemetry and over-the-air software updates? Who will share the analytics that will trigger action at the local level? Will dealerships be in that loop?

 

Dealerships have held a unique position in the distribution network, relating directly with customers daily and representing vehicle brands. Auto retailers have adapted multiple times against various threats over the years by changing facilities, updating management processes and digitizing sales and service procedures and customer records.

But how do they maintain that position if they are not connected to partners that maintain and manage these new data pools?

 

Dealerships must be key players in all of this. It is a strategic goal they must define and defend with their franchise partners. Together they must build a new digital strategy adding nontraditional partners.

 

Dealerships must discover new retailing services. Time is crucial. The new partnerships must beat such formidable competitors as Google, Amazon and Facebook, companies that know how to mine these big data pools for their own benefit.

 

Existing franchise agreements do not address what is needed in this area. That's because financial data for the control and monitoring of dealerships is the primary set of existing digital exchanges. To mine data, dealerships must also create trusted data partnerships.

Dealership owners should demand that their distributors seek, combine and share customer analytics from all their sources to remain relevant and prosperous in the new mobility future.

 

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