The Amazonification of Buying a New Car

The jump in online car sales came in part from consumers doing more of everything online during the pandemic. Automakers have responded to this moment by accelerating their existing plans for digital sales.

General Motors launched a website years ago that allowed customers to find, customize, and order a vehicle, but it saw a 50 percent spike in traffic by late spring 2020. Since then, the automaker has said it will let customers shop, buy, and finance their cars entirely online. Internet, and even pick up a car at home, although the deal will almost always involve a dealer. Electric cars fit this strategy better than gas-sucking ones, says Hess Hassani, GM’s vice president of EV Ecosystem. Battery-powered cars have fewer parts, and the company’s electric vehicles have modular designs, reducing the number of options on offer. This makes it easier for a customer to customize and pre-order a vehicle online, he says.

Honda, which aims to sell electric vehicles by 2040, said its all-electric Acura line will be sold online in the United States. “We see it as a convenient tool, fundamentally meeting customers’ expectations of how they buy their cars,” Mamadou Diallo, senior vice president of sales for American Honda, said at a media event last month.

Ford is also moving toward a more streamlined, Internet-based buying experience, CEO Jim Farley said last summer. “We have to go for a non-negotiated price,” he said, imagining a future in which factories don’t send vehicles to wait in many places anymore, an arrangement more common in Europe. “It goes straight to the customer — 100 percent remote pick-up and delivery.” she poses. Ford also introduced an ambitious program for dealerships interested in selling electrics, which would require those who sign up to spend $500,000 to $1.2 million on site upgrades, including installing and commissioning fast chargers on site.

Talking like Farley makes traders a little nervous. It raises the specter of referring dealerships to operate sales processing and delivery facilities, which also repair cars. Some worry that the end goal of the changes automakers are making around their electric cars might be to make them more Tesla-like—an end point about the dealership model altogether.

The upcoming changes to the sale of cars could cause shocks for some dealerships, who during the pandemic made record profits at a time of high demand for the limited supply of cars. “Dealers are still in this ‘come shake handsome salesman’ mentality,” says Mike Anderson, president of Rickys Group, a car dealership advisory. Selling fixed-price online requires a whole new skill set: facilitating digital transactions, explaining new features online or Over the phone, finding a way to establish relationships with clients without a personal interview.

Many merchants are sheltered, in a sense, from the cold winds of digitization. In most US states, agents’ business models are protected by the force of law – and so are well-resourced lobbyists at state and federal dealers. Seventeen states ban direct-to-consumer sales by automakers, and nine more states limit them, according to the Electrification Coalition, an advocacy group. Tesla and electric new entrants Rivian and Lucid have pushed state lawmakers to revisit these laws, dating back to the 1950s, with little success.


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