Most sales projections coming out of last month’s North American International Auto Show indicate a slow, gradual, but extended decline following a banner year in 2016. However, competition and sales activity looks to be rousing in one niche area of the industry – the online marketplaces – which is forcing traditional carmakers and sellers to react to stronger showings by automotive e-commerce companies.
Who are the change agents that are disrupting the brick-and-mortar dealership model? Well, there are seemingly too many to count, but here are a few of the notables:
- Carvana, Shift and Vroom – the latest pioneers of buying and reselling used vehicles online
- AutoNation – a new vehicle retailer that’s also piloting an online sales and kiosk offering with CarSaver and Wal-Mart
- TrueCar – a car shopping website that entered into a financing agreement with JPMorgan Chase to streamline the loan process
Additionally, e-commerce giant Amazon made headlines when it secured major contracts as part of its push into the aftermarket where it poses a threat to other DIY choices like AutoZone, Genuine Parts and Advance Auto Parts. It would seem this is just one move closer to Amazon selling its own cars, which it already does in Italy. Just imagine, you could soon have a brand new hybrid sedan delivered to your home with a trunk filled with Amazon supplied groceries, household cleaners and electronics…
In a consumer-driven economy, these peer-to-peer marketplaces and vehicle-sales tools offer cash and convenience. Even Andy Moss, CEO of California-based Roadster, has said his goal is not to get consumers into the dealership, but to avoid it and the traditional car-buying experience entirely.
While we may not be surprised by e-commerce’s healthy growth over the years, it will be interesting to see how the industry mainstays respond, as all of these developments and new entrants signal more innovation and realignment within the auto sales business.