Deal­ers re­think­ing how ve­hi­cles are owned, used

Sunday Star - - BUSINESS -

(TNS) — As more con­sumers shop on­line for their ve­hi­cles or give up car own­er­ship al­to­gether, tra­di­tional auto deal­ers are be­ing forced to adapt.

Some are in­tro­duc­ing ser­vices such as car sub­scrip­tions, which al­low cus­tomers to switch from car to car in­stead of own­ing out­right. Oth­ers are of­fer­ing flex­i­ble leases via apps, pro­vid­ing more flex­i­bil­ity than a typ­i­cal three-year lease.

Car in­dus­try ex­ec­u­tives shared some of those in­no­va­tions at a panel this week be­fore the Los An­ge­les Auto Show.

Don Flow, chief ex­ec­u­tive of North Carolina-based car deal­er­ship Flow Au­to­mo­tive, said pro­vid­ing op­tions and con­ve­nience is key to meet­ing chang­ing de­mands.

His deal­er­ship re­cently launched a car sub­scrip­tion pro­gram to a lim­ited num­ber of users. The pro­gram al­lows its mem­bers to re­quest a ve­hi­cle at any time through an app, which is de­liv­ered by a concierge to a spec­i­fied lo­ca­tion. The sub­scrip­tion in­cludes in­surance and un­lim­ited mileage, and mem­bers can choose from more than 20 brands of cars.

“You are about to see an ex­plo­sion of op­por­tu­nity in this space,” Flow said. “We’ll move from just be­ing car deal­ers and re­tail­ers to in­te­grated trans­porta­tion part­ners.”

He said the pro­gram is aimed at pro­vid­ing a cus­tom­ized ex­pe­ri­ence for peo­ple who en­joy driv­ing a va­ri­ety of ve­hi­cles. Other com­pa­nies, such as car-leas­ing app Fair, are re­think­ing tra­di­tional ren­tals and leas­ing by pro­vid­ing a flex­i­ble used-car leas­ing pro­gram that can be ended at any time.

Ge­org Bauer, pres­i­dent of Fair, said flex­i­ble own­er­ship is the way to go when court­ing mil­len­ni­als. Young peo­ple are re­luc­tant to com­mit to one prod­uct for a long time, and are com­fort­able with mak­ing big pur­chases on­line, he said, so deal­ers should “be part of the dig­i­tal revo­lu­tion.”

“I don’t see deal­ers hav­ing to fight tech,” Bauer, who was pre­vi­ously a vice pres­i­dent of fi­nan­cial ser­vices at Tesla said. “If they open up, they will re­al­ize the fu­ture is more dig­i­tal.”

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