Automotive Retailing is growing more and more competitive. With tighter margins and increasingly savvy more-informed customers, Auto Retailers seem to have their work cut out for them.
But many would say that automotive retailers are in the best position to grow and succeed. If, that is, they can adapt and maneuver. But how?
How to Fight Margin Compression and Gain New Loyal Customers
Subprime credit buyers are known to be the highest margin and sometimes the most loyal customers. But finding and servicing the good ones has always been a challenge. This despite the fact that according to Experian, over 34% of car buyers are subprime, 18% are deep subprime and the largest single age sector are millennials, which will comprise over 50% of car buyers in the next ten years.
With all of today’s rhetoric about e-commerce, the “Amazon” experience, and selling cars online, you would think these ideas would be a mainstay by now, and that acquiring these high-margin loyal customers would be easy. But they aren’t and it isn’t, and there are reasons why.
Conversation with John Possumato, CEO of DriveItAway
To talk with us about these things we welcome John F. Possumato [LinkedIn], a dealer-focused thought leader whose company he founded – DriveItAway, offers a dealer-focused shared mobility program.
More specifically, DriveItAway provides dealers (auto retailers) with a turnkey solution to enter the car-sharing, rental, subscription, rent-to-own, and greater mobility-as-a-service emerging businesses. Additionally, the company helps auto retailers adapt to local opportunities within these new areas that e-commerce driven solutions provide.
If it sounds like a mouthful, well, it is, but that’s emerging trends for you.
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In the News…
Coronavirus Shuts Down South By Southwest
The City of Austin has cancelled the March dates for SXSW and SXSW EDU. SXSW will faithfully follow the City’s directions.
We are devastated to share this news with you. “The show must go on” is in our DNA, and this is the first time in 34 years that the March event will not take place. We are now working through the ramifications of this unprecedented situation.
As recently as Wednesday, Austin Public Health stated that “there’s no evidence that closing SXSW or any other gatherings will make the community safer.” However, this situation evolved rapidly, and we honor and respect the City of Austin’s decision. We are committed to do our part to help protect our staff, attendees, and fellow Austinites.
We are exploring options to reschedule the event and are working to provide a virtual SXSW online experience as soon as possible for 2020 participants, starting with SXSW EDU. For our registrants, clients, and participants we will be in touch as soon as possible and will publish an FAQ.
Waymo rakes in $2.25 billion in self-driving unit’s first external fundraising
Waymo just announced a significant milestone: its first external fundraising round. The self-driving division of Alphabet raked in $2.25 billion in a funding round led by Silver Lake, Canada Pension Plan Investment Board, and Mubadala Investment Company, the sovereign wealth fund of Abu Dhabi. Additional investors include Magna International, Andreessen Horowitz, and AutoNation, as well as Alphabet.
To date, Waymo has been an outlier in the world of self-driving cars, relying almost exclusively on the largesse of its corporate parent. That changes with today’s announcement, shifting Waymo into an uncertain but potentially lucrative new phase.
Waymo says the money will help speed up its plans to commercialize its revolutionary self-driving technology
Uber open to using self-driving tech from competition
According to reports, Uber’s self-driving unit is open to using technology from competitors in the industry, the company’s chief executive said on Wednesday.
“If any of those competitors want to put their tech onto our platform we’d be absolutely open as long as their tech is safe enough,” Dara Khosrowshahi said at the Morgan Stanley 2020 Technology, Media & Telecom Conference in San Francisco.
The CEO said Uber was already talking to third parties, but did not provide further details.
Khosrowshahi added that Uber’s Advanced Technologies Group, the autonomous driving unit, had “very significant structural advantages” due to the ride-hailing business including knowledge of routes that generate the most revenue.
Unlike other companies which are working on fully autonomous cars, Uber was focused on automating the simplest and most profitable routes in cities.
“We have a commercialization strategy I don’t see any competitor yet have,” Khosrowshahi said.