This year, technology is finally going to take over the world of automotive retail. Force a wave of transformation. And make everyone rethink everything they ever learned about selling and servicing cars.
Balderdash.
The truth is that every turn of the calendar sees its share of new technology solutions and ideas, all designed to make the business of automotive retail easier, better, and more profitable.It’s an incremental evolution of technology and human advancement, the process of which washes out the bad ideas and strengthens solutions that offer value to customers, dealers, and shop owners.
Just think about how far we’ve come: Today, there are apps that sell vehicles via a subscription. The role of a technician is more like that of a forensic technologist than a mechanic. And today, sensors are basically driving vehicles down the road without human assistance.
The point? It’s progress, and how it makes everyone more profitable and powerful. So in honor of new ways and greater opportunities, here’s a look at what you just might see more of – and less of – in 2019:
Not Hot: New and Used Vehicle Margins
It’s getting to the point where it costs money to sell a new car – and used vehicle margins aren’t that far behind, all things considered. More competition, a saturated market, and a somewhat strange consumer fixation on crossovers has put the market in a state of flux. As a result, that puts more pressure on the service department to run a tight ship and increase profitability, build customer retention and even serve as a source of sales.
None of which is surprising. The service department has long been a foundational part of any dealership. This time, however, there’s more competition on the service side of automotive retail, and service managers will need to bear down on cost and make investments in technology to streamline operations.
Red Hot: Used Car Reconditioning
Used vehicle reconditioning will be one of those red-hot areas in 2019 – if it isn’t already. Turning around used vehicles for resale quickly (and for less) is increasingly part of the crucial role service departments play in helping boost profits.
Dealership managers should be focused on creating a reconditioning process that emphasizes turnaround speed, lowering parts and labor costs – and ensuring efficiency throughout. With a glut of late-model used cars just off lease, managers who know well their “time to line” will gain the advantage of moving more inventory and perhaps help to stabilize margins. Using technology to improve communication between managers and techs is a key step toward reducing the time gap between trade-in and re-sale.
Not Hot: Blockchain Technology
Okay, okay. It’s arguably bitcoin’s greatest gift. But it’s also the ultimate buzzword. Fact is, blockchain didn’t exactly set the automotive retail world on fire last year — unless talk and speculation counts. It undoubtedly will, one day – but maybe not quite yet. There’s just so much to like about the decentralized ledger technology, especially for industries with outdated records tech and mountains of paperwork (see: automotive). Yet something this big takes a long time to develop, and many experts warn about things like transaction speed and standardization slowing down implementation.
Red Hot: AI Technology
Hello, Alexa. Hi there, Google. Our erstwhile artificial assistants are helping to monitor and drive vehicle maintenance – plus much more. Indeed, it’s already happening: many newer cars use some form of AI to monitor hundreds of sensors to detect possible problems and maintenance needs. In fact, Volkswagen and Microsoft recently announced a partnership with the intention of using AI to improve the ownership experience. That includes predictive maintenance, and Over The Air (OTA) software updates, among other innovations.
Fact is, AI is in the service bay at increasing levels. From predictive replacement part ordering to claims adjustments and predictive maintenance and repairs, the name of the game is efficiency. Look for increases in AI across the dealership as it proves effective at lowering costs and streamlining workflows. One need only look at the emergence of chatbots as an example of how AI technology can work with employees to create timely and complete experiences.
Not Hot: Autonomous Vehicles
It gets all the headlines – for good and bad reasons. As a result, the march toward self-driving vehicles is anything but a straight line to customer driveways. As advanced as self-driving tech companies have become, and despite their advancements on the commercial side of transportation, ethical and technical issues are to be sorted out. Of course, most of us know about the accident that killed a woman in Las Vegas as she crossed the street with her bicycle, but there have been other accidents and glitches as testing has increased.
Not that any of this has stopped the self-driving phenomenon. The benefits in terms of safety, efficiency and fleet use are too strong for the technology to not make an indelible impact. As testing continues onward, look for more measured and cautious progress as autonomous vehicles begin to find their place in the automotive world – including service and repair.
Red Hot: Electrified Vehicles
All manner of electric vehicles are available today, and that selection is growing quickly. From hybrids to plug-ins and daily-driver EVs, car buyers are being treated with more power and greater efficiency than ever. One only need pay attention to the number of Teslas on the road – and charging stations available. Worldwide, in fact, EV sales reached around 1.4 million vehicles.
But that’s not the hot change for 2019. What is even more significant is the accelerated switch from the long-standing 12-volt vehicle electrical system to a 48-volt system. Up to now, we’ve seen 48-volt systems in a few luxury vehicles, but it looks like the transition is moving into the mainstream. That’s likely driven by demand for gadgets and power-laden features such as advanced audio systems, ambient lighting and start-stop functionality — not to mention electronic turbo systems and mild hybrids.
More practically, however, is the reality that automakers have been shifting from mechanical parts to electronic componentry under the hood. Ultimately, after more than 60 years the power needed for vehicles is now too much for 12-volts to handle. It’s a change that may have a direct impact on your service techs, as they will need to know how to work with 12-volt systems and 48-volt systems. And it is yet another example of how technology is helping to drive a more powerful and robust automotive world for 2019 — and beyond.