8 February 2019

Thoughts, insights and new challenges from the 2019 NADA Show

After a few days since the end of the 2019 NADA Show, let’s share some insights and considerations that the Quintegia Team in San Francisco managed to listen and elaborate. In the yearly convention, it has been described an automotive industry deeply dynamic and evolving, on the verge of a period of market contraction that will result in a redesign of the organizational structure in fewer dealers and larger groups, with an intense activity of M&A. Self-driving cars and car sharing are the main disruptors that will influence the industry in the next few years, pushing for a change in traditional business models and probably ending up in merging in one new and revolutionary form of mobility.

Many services, especially online, are leveraging these and other new trends. One example is Fair, subscription service via app that allows you to have a car paying a monthly fee but with the possibility of changing models at any time and without any long-term commitment, promoting maximum flexibility. More and more dealers choose to be present exclusively online, Carvana is the one mentioned by many speakers. It’s an online platform selling used cars, with one of the best user interface and website ever, costumer-centric and -friendly where you can easily complete the entire purchasing process online (including paper works and free delivery at home). Other best practices analyzed are Joydrive, AutoGravity and Paragon Honda (pick-up and delivery overnight service), together with the revolutionary Aptiv focused on the creation of enabling technologies for self-driving and greener cars.

And how do dealers fit in this scenario? Their role, that could almost seem clouded by these new players, is actually more central than ever because they are the key to offer a complete and satisfying buying process. New customers ask for an omnichannel and integrated experience, where the walls between physical and digital but also between sales and after-sales need to be torn down, creating the possibility of living the entire life cycle of the vehicle in a fluid and easy way, with great opportunities for dealers in terms of loyalty and retention.

Players are therefore called to adapt to the new needs of customers, that want to avoid the waste of time, reducing long negotiation and procedures. Furthermore, customers complain about the lack of transparency above all about the final price and especially online, just think about the fact that in the most part of dealer websites there isn’t a “buy now” button. Adding that, even just to start a purchase to finalize in the dealership, would show transparency, clarity and speed of the process. Customers have a fundamental need of validation originated by their buying behaviors in other industries (e.g. Amazon), that means verifying what they want to buy comparing it with other offers (comparison shopping). There are a lot of examples of dealers that have added, for every selling ad, the link to the offers of their competitors to make a comparison. The third important need of customers is customization, that could be declined in designing different selling models, such as: full service (for customers who want to buy their car in the physical dealership), self service (where every step of the purchase is manageable online), modified service (a balanced mix of the first two). The model that seems to be the winning one? Research and shopping online, test drive and purchase offline.

It’s also worth mentioning the numerous workshops dealing with the topics of human resources and motivation in the NADA Program. According to the speakers, the key element that managers need to add to their corporate thinking, sometimes too dependent on data and routines, is creativity. In particular Mark King, head of the recent change in the marketing and communication strategy of Adidas, summed up in 5 points the principles that every good manager should follow: strive for the higher goals and pursue them relentlessly; seek new ideas and suggestions every day; use a distributive leadership style rather than a commanding one where responsibilities are shared; in choosing a employee search for passion, creativity and the ability of taking initiatives.

The 4-day convention has been an important checkpoint to understand the current situation of the automotive industry and where it is headed. The vivid context and the substantial International participation have created a unique hub of networking and contaminations that represent a perfect starting point for a shared journey of growth and innovation.