Normally
Dave is more geared towards dealership news and I’m more focused on posting
financial information that affects the auto industry, but this week our
Marketing Manager Jamie Rubenovitch shared some very interesting information
with me on a new type of dealership that I would like to discuss today. We’re
all used to going online to check out a new car we’re interested in buying and
then heading into the dealership next to interact with the salespeople and get
the lowdown on our potential new car. This may be a thing of the past as Audi
came out with their first virtual showroom in 2012.
My first
thought was “what is a virtual showroom?” Well it’s apparently a lot like what
we see in the movies – floor to ceiling digital and 3D screens showing customizable
vehicle exteriors, interiors, engines and colours. Now that Audi is on to their
second of a proposed 20 virtual dealerships (first was London and most recently
Beijing), other auto brands/manufacturers are trying to keep up.
BMW is
working on bringing “geniuses” to the dealership. Similar to how Apple has a
genius bar of technologically savvy people who are available to explain
features and answer questions, BMW will have auto savvy, iPad wielding staff
available to answer any level of question.
But what
are the benefits of a virtual dealership? They enable dealers to have a
presence in smaller urban spaces they normally couldn’t have fit in before. If
they don’t need sprawling room for 5-15 cars, they can set up shop in a popular
mall and reach more people.
Consumers
also benefit from being able to see the ins and out of a vehicle without having
to drive to the suburbs and climb underneath the hood. On the flip side, could
you buy a car without ever actually driving it? I guess that’s what the regular
dealerships are for, and they’re not going away anytime soon.
So far
virtual dealerships don’t exist in North America, but it will be interesting so
see the degree of consumer acceptance. Dealers have significant investments in
their buildings and showrooms. Cars still need to be serviced, so that part of
the business likely won’t change, however, what happens to the showroom? I
believe consumers still want to “kick the tires” and experience first hand the
automobile they may purchase. No matter how sophisticated the graphics and
websites are, there will be initial reluctance to buy sight unseen. Automobile
purchases represent significant investments to most consumers; it’s definitely
not like purchasing a cell phone or small electronic equipment. People want to
drive the car and see first hand what it has to offer.
So “hats
off” to Audi and BMW for their respective efforts to stay competitive and ahead
of the curve. However, this accountant feels that we are still years away from
automobile dealers shutting down their showrooms and displaying their cars only
on digital screens. Mind you, if consumers are offered virtual rides in the
future that realistically represent rider experience, who knows what may
happen.
- Jeff
