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Entries in Technology (7)


Closing A Deal

Reflect on some point a customer will interface with a touch screen and close a deal on a vehicle in a showroom. Similar to a self check out in a grocery store.

Sounds totally far fetched, considering the disparate software that is currently in most showrooms.

Imagine for a moment Watson from IBM takes over the entire showroom activity with a touch screen, and a human assistant to guide the customer along.

Totally the wall...

AV's deserve an autonomous showroom...again off the wall.

Lets look at a few points in no particular order.

  • Everyone has a consistent showroom process (or they wish they did).
  • A consistent process is like an assembly line with robots.
  • A bunch of decisions are made with the assistance of software.
  • Numerous software entities are working towards "software closing and processing a deal".

But the metal must resonate...agreed.

  • With the ever increasing popularity of utility vehicles (a box with a turbocharged 4 cylinder).
  • We all know that utility vehicles are lifestyle oriented with a brief shelf life.
  • When it comes to utility vehicles "how much must the metal resonate?"

Its absolutely far fetched, and looming on the horizon.



What One Consumer's Car Buying Process Reveals...

We all know that it starts online, and now more often on a mobile device, an informative walk through the buying process of one consumer.



Used Cars...Really

There was or perhaps there still is a saying "If you want deeper insight into a dealer look at their used car department". Take a quick look at how any dealer runs/manages its used car department and comes to terms with the myriad of variables and software that is available in 2015.

The unique feature of the retail auto business is that dealers after 100 years are still "horse traders" and will continue to be horse traders for the foreseeable future.

The used car department is where a dealer washes out his deals.

Reflect on this for a moment, a dealer sells a vehicle, while taking another vehicle in trade as partial payment. At some point the dealer must convert the trade in (partial payment) back to money to recoup the full payment of the first vehicle.

The dealer must wash out his original deal to recoup all the money. After decades, generations, the auto business still assigns an "A" to the stock number of the first trade in, subsequently a "B" and so on. With all the technology some things never change.

Can I create a retail customer with this trade in?

Simple question that every dealer should ask for every trade in. Agreed...with the available technology, platforms, opinions, experts, the simple question becomes complex to answer.

Not only create a retail customer, but how fast.

The faster, the better, there is a partial payment tied up in this trade in.


Back in the day, reconditioning was the process of putting value back into a used vehicle to get more money for the vehicle, and have a satisfied retail customer.

Today with market prices, reconditioning walks a fine line. Is the customer seeking a competitive market price, or a correctly reconditioned vehicle with added value for a higher price.

Certified Pre Owned

In 2015 CPO is the equivalent of the correctly verified and reconditioned (putting value back) vehicles. In Canada CPO is a process that initiated a generation ago. Its not new.

If I don't want to create a retail customer with this trade in?

Certain vehicles that must be taken in trade do not fit the retail profile for a myriad of reasons. If you don't want to create a retail customer, then you must create a wholesale customer for the trade in to convert it back to money.

I tried to create a retail customer and it did not work?

Now the mind games start, even with all the technology the extent of the human mind games, by the various stakeholders is fascinating.

At this point and time its a retail fail.

Absorbing a loss...really?

To be a successful, competitive horse trader, entails being mature to take losses on vehicles. Where ever the loss originated.

Its usually where a ton of folks go into denial mode.

Stick to the plan...really?

The plan goes back generations, its the same plan, now empowered and facilitated by technology. immense really?

We all know or should know that technology compresses time. With all the technology that is available to operate and manage a used car department. Time is profoundly compressed, as well as offering a competitive advantage.



Humans vs Technology

With the increased advances of a myriad of technologies in the auto business, be it in the vehicles, at the dealer, and with the customer.

Its an absolute digital festival that is fascinating, encouraging, and perhaps a little dehumanising.

There is technology for this, an app for that, a visual for this other thing, an integration there, we could keep on surely get the overall picture.

Although on many levels its encouraging to witness, experience and live with the advances in technology, we remain humans. Yes...we are empowered, and compete with technology. Usually being aware of the empowerment, while overlooking the compete aspect.

In the auto business we all experienced a learning curve, from robots in assembly lines, CAD to engineer a vehicle, DMS at the dealer level, to smart devices in the hands of customers. We usually focus on the technology, how to use this, how to operate that, how to develop and "xyz" strategy for this other thing.

When you think about it, its a snippet here, a morsel there, a couple of lines somewhere else. Its easy to understand or supposed to be, its easy to sell, and for some easy to monetise.

Its a process here, another there, and aided by technology the processes are supposed to be consistent, repeatable, measurable. If you are in the auto business at the retail level, reflect on this for a moment. You have a myriad of technology and processes from the showroom, to the service and parts department, to the accounting department, to the BDC (business development center) and so on.

While the prospect / customer is also loaded with the technology.

Its not all seamless, or easy.

In the showroom there is a higher level of friction...

What do you think?




Cloud Transportation

What does cloud computing have to do with cars?

From an historical perspective not much, except for technology in the center of the dash, which recently was hacked.

What does cloud computing have to do with "transportation"...yes Zipcar, Uber to name a few. Cars (vehicles) are transportation, and mobility.

In Canada we increasingly have what we at Strada have called a "mobility model" at $500 a month not an ownership model.

If you are in the auto business...reflect on this for a moment...transportation, mobility, cloud, technology, leasing, renting, the role of the dealer, the future customer.

Then take a look at What the Auto Industry Can Learn from Cloud captured our attention, its thought provoking.

From a dealer's perspective consider the following, new vehicles, used vehicles, and a new fangled "cloud transportation" department.

"What vehicle do you own?"....."Own...what is that? I have a cloud transportation agreement with manufacturer XYZ through my local dealer" as an example.

Uber is a provider of cloud transportation, take a look at how Uber provides vehicles to its drivers through XChange Leasing.

We could keep on going, but surely your imagination is fired up by now...




Some Questions and Answers

Lets get going with a few questions, and answers that have developed through the years.

What would happen if Wal Mart went in the car business?:

A few decades ago it was a fascinating question. As to what would happen if Wal Mart became a dealer. Today's dealer groups are the answer to the question. Think about it, huge groups with numerous franchises, public and private funds. Exerting influence on manufacturers.

Vehicles will reach a level of parity:

Remember when some manufacturers had better products, quality than others? Today with increasingly less platforms, accompanied by an increase in common components. There is a strong level of product parity amongst all manufacturers. You know the saying "They are all good vehicles". Think about this for a moment.

Vehicles will become a commodity:

In the mid 1980's the thought vector that with a level of parity, vehicles would increasingly become a commodity. At the time it was unthinkable, "they will never become a commodity". Today CMS (Citizen Main Street) wants a vehicle with a warranty, and a service package. Think about this...

What happened to the mechanical car?:

The mechanical car that was service intensive, often unreliable, and rebuildable, is on a vector of rapid extinction. Carburetors, distributors, ignition points, hydraulic power steering with a steering box, hydraulic valve bodies in automatic name a few. That stuff is from yesterday, and non existent on today's vehicles.

What happened to the manual assembly line?:

Its gone, same as the carburetor. Robots perform a majority of the precision tasks on a modern assembly line. While manual labor the little that is required can be done in a secondary country with dramatically lower labor rates. The auto industry that for a couple of generations empowered blue collar middle class workers, is now empowering robots, and lower wages. Remember "Japanese assembly lines can run with the lights out"

Why are vehicles with leading edge mechanical components expensive?:

The moment any manufacturer steps away from common, mass produced mechanical components the price escalates dramatically. Think high performance, high horsepower, ceramic brakes, carbon name a few. High performance is more expensive than a few generations ago.

Why is the cost of technology inexorably rising?:

Simple there is increasingly more technology in a vehicle. CMS demands more technology, the cost savings from mechanical components are applied towards the increased content/costs of technology. Its a delicate balancing act.




The Backstory

Yes...there is a backstory.

Thirty years ago (1985) before the widespread use of computers, word processors, Internet, social media, way back then The Colonel crafted a vision of the auto business for 1995.

In 1985 it was a different auto industry, and auto business, with cars that were mostly mechanical with only a few black boxes.

It was also a time when you could sense the advancing impact of technology on the product, and the business.

A few relevant points from way back in the day:

  • The boom in luxury vehicles was emerging.
  • Detroit was losing ground.
  • The Japanese built a better car.
  • The Koreans were emerging.
  • Manufacturer/dealer relations were friendly/adversarial.
  • Used cars were going to increasingly be a factor.
  • CMS (Citizen Main Street) was demanding a better/safer product.
  • Technology (computers) would increasingly touch most facets of the business.
  • The global footprint of the industry would increase. 
  • Its people designing, engineering, assembling, selling, servicing the product.

We could keep on going, but you surely grasp the essence of what was going on 30 years ago, and what the perspective would be in 1995 (20 years ago).

What is fascinating, the Internet started emerging 20 years ago, social media became widespread at least 6 years ago. Its still talked about is if it happened yesterday.

Twenty years ago we knew that the information residing in the showroom had embarked on a path of being disintermediated.

Often the technological progress of the product, masked the stodginess of the actual business.

With the PC's that were available in 1985, accompanied by the bulkiness and limited coverage of cell phones. Although we all knew the basics of Moore's Law; it was challenging to foresee that at some point everyone would be going around with a PC (smart device) in his pocket.

The first generation of "digital natives" (millennials) are now working in the auto industry, and increasingly buying and leasing vehicles.