The past year has shown how fast people can adapt to change. The year also underlined that fact that there was a lot of room for positive change. The temporary halt enabled global systems to pause and introspect, point-out the lags and reboot with higher efficiency and better performance. At the other end of the spectrum, consumers were compelled to explore the digital domain and form new shopping habits and patterns.
Car selling has already undergone a sea of change in the past few months. Despite the pandemic, several new cars were launched virtually, people went on test drives by pre-booking appointments and bought cars of choice from stores. If a few months can change the car buying experience so extensively, then what will it look like after a decade? Three senior executives from McKinsey shared their perspectives.
Thomas Furcher, partner at McKinsey Vienna, said that when customers were asked about their preferred method of buying cars, no specific model of shopping emerged as favorite. Customers just longed for a personalized experience and a car shopping experience which is fun.
Inga Maurer, partner at McKinsey, Chicago, envisions an omnichannel experience for car buyers where the purchasing process will be initiated in online, may be on a website or an app. The consumers of the future would not look for products by brands but by features or styles that match their personality, allow them to express their style and are best suited for their purpose.
Paul Gao, senior partner at McKinsey Hong Kong, feels car sales and service will split in the near future, although the physical delivery point for making the formal purchase will still linger on in 2030 since people will still want that final handshake that makes them a car owner, especially for the high-end luxury and sports cars.
Car dealership in future
Currently, dealers have to bear high costs because they need to keep cars physically in the dealership outlets. In the future, dealerships will have much lesser number of cars and quite possibly there will be virtual reality car kiosks where customers can change the configuration of any car before they make their final buying decision, opines Furcher.
Maurer feels that very soon customers will consider more than just buying a car. While they need a compact car through the week, they will need a much larger car for the weekend getaways. To fulfill both these needs they might buy the smaller car and purchase a package for getting access to larger cars on weekends and holidays. Basically, an arrangement that is tailor made to suit their personal needs.
Transition to a complete digital dealership might be a long way off, especially for developed countries like US, where regulation hurdles need to be straightened first. Gao thinks, transition from physical to digital dealerships will happen much smoother in developing countries like China or the Asian region.
Pricing, however, is expected to get much easier. The car price or access package will be fixed with no room for negotiations. Rather online portals will enable consumers to browse vehicles and see their credit score at the same time, to simplify decision-making. Subscription packages for accessing cars is also expected to become a reality by 2030.
Furcher opined that buying a car might actually become cheaper but the price of access to a car, may be for a month or for weekends will become the trend. The price range might vary based on the type of package or subscription chosen by the customer, but the price will be fixed.
Gao envisions a different role for dealerships – he feels ten years down the line, dealerships will have fleets of used and new vehicles and provide local mobility services to customers. To become future-proof, dealerships will need to specialize as per the clientele they want to serve, because customers would have very specific needs and preferences.