J FERRON

Dealerships must secure a role in industry's data ecosystems

J Ferron is director of strategic development at Automotive News and director of judging for the Automotive News PACE Awards.

The future of mobility as described in January at the Automotive News World Congress and CES involves smart consumers plugging smartphones into smart vehicles to navigate smart cities.

But where do dealers fit into this emerging digital ecosystem?

Indeed, this future raises an essential question for dealers and for the National Automobile Dealers Association: What actions are needed to keep dealerships relevant in a world where everything vehicle- and mobility-related is connected, but not necessarily through dealerships?

Vehicle and tech company senior executives describe ecosystems pulsing with actionable information on customer preferences and vehicle and infotainment use, as well as buying or sharing intentions — all revealing unmet needs. But this is presented with only minimal acknowledgment that dealership entrepreneurs succeed because of their deep local insight.

Thus, there is a huge gap between dealers' perspective of the future — seen from their physical locations and existing relationships — and designs for mobility ecosystems, where everything is connected and free-flowing.

Dealership owners cannot be complacent at this juncture. The mobility future is only a threat to them if they become disconnected from the mesh of data collaborations that are forming.

The threat is not merely from high-tech disrupters but from senior industry executives and consultants looking for digital approaches to new profit centers without the involvement of current retailers.

A first step

One immediate step needed is to amend the franchise contracts between retailers and vehicle manufacturers. The documents define rights and standards based primarily on the movement of physical goods from a specific location. With virtual stores, autonomous vehicles, digital deals and paperless transactions, dealerships need more protection for their intellectual property and more acknowledgment of their marketing capabilities.

Vehicle producers and distributors need to expand their agreements to leverage their best data partners — dealerships.

Who else is better qualified to address customer mobility needs, predicted or perceived? A system of connected customers and disconnected dealerships will not be good for customers or manufacturers.

Valuing data

Also needed is a method of establishing the value of dealership data. Historically, a dealership's physical assets are the key balance-sheet element for borrowing and operating leverage. But missing from the financial statement is the value of customer data, connections and potential profits from that enhanced data.

The long game of the auto industry's new entrants is to keep dealerships out of the new services that will be discovered as mobility needs are revealed. They will do it by building analytic systems without insight from dealerships or by giving retailers a minimized, traditional maintenance role.

Dealership data are the key to defining the future revenue streams and new mobility profit centers. It is up to manufacturers to help dealers navigate the new data oceans.

Both parties must benefit from the work of data scientists and analytic insight intelligence systems that carmakers are building. Shared insight will allow both to act more quickly and precisely to meet mobility opportunities.

You can reach J Ferron at jferron@crain.com

25

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.


Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences