Audi Just Reinvented the Dealership Experience

[Tone]

Audi Just Reinvented the Dealership Experience
By Damon Lavrinc, July 17, 2012, Wired Autopia
http://www.wired.com/autopia/2012/07...ty/#more-47964



If there were ever a retail model ripe for disruption, it’s the humble car dealer. And Audi thinks it has the answer with Audi City.

The goal is to bring some of the comfort, convenience and customization you’d get from an online car configurator, but with the added convenience of an informative, low-pressure, carbon-based sales rep and a range of new technologies to bring your ride to life – virtually – before you sign on the dotted line.

Think of it as the Apple Store for Audis; smaller, lighter, more scalable, and infinitely more interactive. And Audi is betting big on the concept, with plans to erect 20 more stores worldwide in the next three years.

More at link.

[BlackGTP]

Awesome idea! Especially for areas where there is no dealer.

If GM applied such an idea I could still see dealers howling in protest, even though the store is linked to a dealership. I'd be interested in seeing the current dealership model scrapped and in it's place have GM kiosks like the Audi store in the article, these kiosks will be GM owned. There will then be GM repair shops throughout the country (GM brand, not Caddy, Buick and Chevy). GM can then have large regional GM owned "parking lots" for inventory to deliver cars from. I think this would be a much more efficient setup. GM can control the sales portion and avoid the 70 year old, out of date dealership. The repair shops can be independently owned. And the fact that the GM repair centers are for all GM cars in an area will allow for greater economies and profits vs having each dealer with their own repair shop. And there can be repair centers in smaller locations that can't support a traditional dealership.

Summary:
- GM owned "stores" - low cost and easily updated, low cost allows penetration to small towns that can't support dealerships
- GM owned regional "parking lots" to deliver product from
- Independently owned GM repair shops, higher profit due to no sales showroom and required overhead/inventory. Also allows for repair shops in towns that can't support a traditional dealership.

Sadly, this can never happen, this is change and dealers won't allow.

Thoughts anyone? Good idea or bad idea?

[Quickening]

I like the idea. I'm never going to buy a car on the lot, so the whole dealership is quite pointless to me. I just need to be able to order the vehicle I want.

[BlackGTP]

I like the idea. I'm never going to buy a car on the lot, so the whole dealership is quite pointless to me. I just need to be able to order the vehicle I want.

I think the whole idea of dealerships as we know it is very 100 years old. Very inefficient and adds to the cost of the car. Think of the market penetration GM can have if they just have kiosks and online ordering. The larger kiosks can have demo cars for test drives and will be where you pick up your new car. With no dealership GM can lower the cost of the car and probably get a flat price - no haggling.

Sadly, I think the inefficiencies of a dealership are locked into place and we will be stuck with the current model for a very long time.

[calgaryhhr]

Awesome idea! Especially for areas where there is no dealer.

If GM applied such an idea I could still see dealers howling in protest, even though the store is linked to a dealership. I'd be interested in seeing the current dealership model scrapped and in it's place have GM kiosks like the Audi store in the article, these kiosks will be GM owned. There will then be GM repair shops throughout the country (GM brand, not Caddy, Buick and Chevy). GM can then have large regional GM owned "parking lots" for inventory to deliver cars from. I think this would be a much more efficient setup. GM can control the sales portion and avoid the 70 year old, out of date dealership. The repair shops can be independently owned. And the fact that the GM repair centers are for all GM cars in an area will allow for greater economies and profits vs having each dealer with their own repair shop. And there can be repair centers in smaller locations that can't support a traditional dealership.

Summary:
- GM owned "stores" - low cost and easily updated, low cost allows penetration to small towns that can't support dealerships
- GM owned regional "parking lots" to deliver product from
- Independently owned GM repair shops, higher profit due to no sales showroom and required overhead/inventory. Also allows for repair shops in towns that can't support a traditional dealership.

Sadly, this can never happen, this is change and dealers won't allow.

Thoughts anyone? Good idea or bad idea?

This is the exact same approach that I am for. I really believe that a network of small, showrooms/sales centres would really help market to customers who wouldn't otherwise have a chance to visit a dealership (or want to visit a dealership.) These could easily be established in shopping malls or metro areas (downtown) where space is limited and a traditional dealership couldn't otherwise exist.

At these locations customers could learn about the vehicles and options and packages and prices. These locations could also handle the ordering (if a customer doesn't want to order online) and they could also do the required paperwork and financing and whatever else.

For test drives customers could arrange for a vehicle for a period of a day or two so that they could get a better experience than a traditional test drive. GM could even look at charging a marginal cost ($25 or whatever) for the vehicle which would be refunded or applied to the sales contract when the customer purchases a vehicle.

[2648562]

The sad thing is ideas like this, and even some of the great ones I've seen in this thread already, have kicked around GMI for years.

[BlackGTP]

The sad thing is ideas like this, and even some of the great ones I've seen in this thread already, have kicked around GMI for years.

And I'm sure they have kicked around GM as well, but the dealerships are most likely the stumbling blocks to change is my guess.

[calgaryhhr]

And I'm sure they have kicked around GM as well, but the dealerships are most likely the stumbling blocks to change is my guess.

I would tend to agree that the current dealership establishment is a stumbling block. I also think that the "contract" GM has makes it difficult to do new things. I don't believe GM can do "corporate run" stores because they would compete with regular dealerships.

I think another stumbling block is technological innovation. I don't believe that GM and their current dealership network is capable or willing to put the technology in place to really showcase product to customers in a kiosk or boutique environment. Up until recently, GM had a pretty terrible website and they still have many issues with their website.

[Tone]

If I recall correctly, back in the '80s, Porsche considered opening company-owned dealerships to gain more control over the sales experience. Porsche dealers, needless to say, weren't happy. I believe they may have even sued (or threatened to sue) Porsche over the plan, which quickly went away.

The trouble is that the manufacturers have essentially sold the rights to sell cars to independent dealers. Anything that threatens that is potentially a breach of contract. Audi's approach seems to avoid that by ensuring that any actual sales/deliver happens at a dealer. If it's successful, you may see more companies take this approach, complementing their marketing and brand efforts.

[mr_raider]

Awesome idea! Especially for areas where there is no dealer.

If GM applied such an idea I could still see dealers howling in protest, even though the store is linked to a dealership. I'd be interested in seeing the current dealership model scrapped and in it's place have GM kiosks like the Audi store in the article, these kiosks will be GM owned. There will then be GM repair shops throughout the country (GM brand, not Caddy, Buick and Chevy). GM can then have large regional GM owned "parking lots" for inventory to deliver cars from. I think this would be a much more efficient setup. GM can control the sales portion and avoid the 70 year old, out of date dealership. The repair shops can be independently owned. And the fact that the GM repair centers are for all GM cars in an area will allow for greater economies and profits vs having each dealer with their own repair shop. And there can be repair centers in smaller locations that can't support a traditional dealership.

Summary:
- GM owned "stores" - low cost and easily updated, low cost allows penetration to small towns that can't support dealerships
- GM owned regional "parking lots" to deliver product from
- Independently owned GM repair shops, higher profit due to no sales showroom and required overhead/inventory. Also allows for repair shops in towns that can't support a traditional dealership.

Sadly, this can never happen, this is change and dealers won't allow.

Thoughts anyone? Good idea or bad idea?

Blasphemy! Your ideas make sense. Clear thinking like this should be disallowed.

Sent from my Galaxy Nexus using AutoGuide.Com Free App

[BlackGTP]

However, it would be great if the stores were GM, but there is no reason the dealerships couldn't transition to the kiosk format. It would be cheaper for the dealership as well as they wouldn't need to have all of the overhead of having to maintain stock - just one or two examples of each vehicle. GM could open up kiosks in the unserviced (no dealerships) areas. GM could then have a standing invitation to the dealers - if a dealer wants to sell to GM, GM will buy them. Over time GM will own more and more of their "dealers". The "regional parking lots" could be set up now to deliver stock to the dealerships (operating under the current, archaic way) and new kiosks in the unserviced area. As more dealers switch to the kiosk method the "regional parking lots" can grow.

It can be done.

[Neanderthal]

If I recall correctly, back in the '80s, Porsche considered opening company-owned dealerships to gain more control over the sales experience. Porsche dealers, needless to say, weren't happy. I believe they may have even sued (or threatened to sue) Porsche over the plan, which quickly went away.

The trouble is that the manufacturers have essentially sold the rights to sell cars to independent dealers. Anything that threatens that is potentially a breach of contract. Audi's approach seems to avoid that by ensuring that any actual sales/deliver happens at a dealer. If it's successful, you may see more companies take this approach, complementing their marketing and brand efforts.

I think we still need dealerships for parts & service. And there are probably lots of folks who might not be comfortable in a non-traditional sales kiosk.

IMO the worst thing about dealerships is the sales staff.

Some saleshomies are very sharp.
A few actually know more than Jack S*** about their product.
The rest should be learning how to operate a tire balancing machine and an air wrench, or how to stampede shopping carts into a corral so they can serve a useful purpose in life.

[balthazar]

If the sales kiosk operates at even 20% of the frustration level of the typical phone bank hell most commercial entities employ, it'll COST GM sales. IOW- it had better be damned good, informative, on-the-ball programming...

[calgaryhhr]

If the sales kiosk operates at even 20% of the frustration level of the typical phone bank hell most commercial entities employ, it'll COST GM sales. IOW- it had better be damned good, informative, on-the-ball programming...

When you compare to the frustration that can be experienced at a dealership when trying to get information about a vehicle or order/purchase a new vehicle I don't think the bar is set very high.

[MrCritical]

If you havent' figured out yet how much more you're paying per vehicle since GM closed all those dealerships, you'll be happy when they do away with them all and you deal directly with the manufacturer. But it'll cost you, my friend. Competition among dealers saves you $$$$. There will be no competition when you buy directly from the manufacturer. Take it or leave it.