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Automakers race into e-commerce

Illustration by Kate Walker

Automakers race into e-commerce

 

The Future. Automakers are taking a look under the hood of how the industry is selling their vehicles and are becoming convinced that moving transactions online may be the best way to go. While there are still several operational and legal barriers, an acceleration into direct sales and e-commerce may force dealerships to offer unique, experiential services to stay relevant.

World Wide Dealership
Per NYT, automakers want to follow Tesla’s lead and turn to e-commerce to get vehicles off the lot.

  • EV makers Rivian and Lucid Motors are copying Tesla’s strategy of selling almost exclusively online, building only a small number of stores and service centers, and having mechanics come directly to an owner’s home for most repairs.
  • In Europe, Volkswagen, Volvo, and Daimler have started selling their cars online or have announced plans to do so.
  • In the US, Ford CEO Jim Farley said he wants to sell the company’s EV exclusively online to manage inventory better and lower costs. If Ford finds a way to do it, expect nearly every other automaker to follow suit.

Choose your showroom
Like buying products on Amazon, people are so far enjoying purchasing cars online (because buying cars in person takes forever). But they do report that dealing with repairs and other issues can be a hassle at times, especially if they live far away from a Tesla service center, for example.

According to a study from Cox Automotive, people mostly want to switch to an e-commerce model for buying or leasing cars, but they also want to keep dealerships — which are essentially middlemen for car companies — around to handle services that should be done in person.

And with current state laws, automakers may not have a choice but keep dealerships around because they require that cars are sold through franchised dealers. And in Tesla’s new home of Texas, customers can’t even take advantage of an EV tax credit since Teslas aren’t sold through a dealership.

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