A Cox Automotive survey found that dealers are even more certain than consumers that emerging trends will reduce vehicle sales, but few believe mobility will bring about the end of the current auto retail model.
by Staff
October 22, 2018
3 min to read
Illustration by Mohamed Hassan via Pixabay
ATLANTA — Auto dealers and consumers are more closely aligned on the future of mobility than many industry experts might imagine with both expecting significant reductions in personal vehicle ownership, according to new research from Cox Automotive.
In fact, analysts said, dealers are predicting an even sharper decline in ownership than consumers in the next five years (28% versus 18%). However, while most of the dealers surveyed appeared to recognize this eventual reality, only one in 10 see mobility as a threat to their current business, according to the second phase of the 2018 Cox Automotive Evolution of Mobility Study: “A Dealer’s Perspective.”
Ad Loading...
In the latest chapter of Cox Automotive’s three-part study series, an online survey was conducted with 430 franchised and independent automotive dealers in the U.S. The first phase of the Cox Automotive Evolution of Mobility Study, released in August 2018, focused on consumer perceptions of Alternative Ownership and Autonomous Vehicles. Among the findings:
• Strong growth is expected in alternatives to traditional ownership. Like any industry undergoing transformation, consumer acceptance over time is often the key driver. While still in its infancy, mobility is no different. In the next 10 years, nearly half (47%) 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.
Ride-hailing (87%) is predicted by dealers to see the most growth, followed by car subscriptions (82%), car-sharing (81%) and autonomous vehicles (81%).
• New forms of mobility are seen as an opportunity, not a threat. With dealers challenged by declining new-car sales and margin compression, 45% say they see new shared mobility models, such as ride-hailing, car-sharing and car subscriptions, as new revenue streams. Three out of four dealers see a benefit in offering these shared services at their dealerships, with 40% viewing mobility as an opportunity to appeal to a new consumer base. More than half (59%) 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.
Any hesitancies by the dealers surveyed toward these new mobility solutions are due to the uncertainty surrounding operations rather than rejection of the models themselves. This includes knowledge of how to set these services up, outside support to get these services off the ground and the overall cost benefit.
Ad Loading...
“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, we’re focused on enabling dealers with innovative consumer mobility and shared fleet service solutions to keep their businesses relevant.”
• The current dealership model will change, but it won’t go away. Even with the shift from traditional ownership to usage and a more personalized “one-to-many” design of on-demand transportation, 72% of dealers do not view these mobility trends as the end of the dealership model. However, they do believe the number of dealerships in operation will be impacted, with 57% of the dealers surveyed saying there will be a need for fewer dealerships 10 years from now.
Building on a previously announced $26 billion U.S. investment, Hyundai said it will grow its North American lineup and U.S.-based production and parts sourcing.
Sony-Honda venture cancels two planned models, the first of which had been pegged for a mid-2026 California delivery debut. The brand’s direct sales had been challenged by the state’s auto dealers, but the venture cites Honda’s EV retreat.
Softening prices, rising credit availability and higher tax refunds could be behind February’s sales pace rise and accompanying dip in inventory, according to Cox Automotive.
The agency sent warning letters to dozens of auto groups about what it described as illegal practices and urged them to ensure their pricing policies enable transparency with consumers.
New-vehicle sales fell year-over-year for the fifth month in a row in February, making retail deliveries the slowest they’ve been since 2023, according to a CarGurus report.
The automaker says its California skunk works is already finding efficiencies to lighten traditionally heavy electric vehicles for lower cost, plus extended range.
GM says it sells the cheapest electric vehicle in the U.S. market. It explains how it made improvements to the entry-level EV while keeping its price down.
