The disruption in the car industry continues.
Wal-Mart announced last week that beginning this spring, the company will begin installing “CarSaver Centers” at Supercenter locations alongside Wal-Mart’s instore banks and eyeglass shops. People who are interested in buying a new or used car can walk up to a kiosk and check out a car in the CarSaver Network. The consumer will be able to not only find the car of their dreams but also obtain auto financing and insurance as well. Shoppers will then be directed to a local dealership to sign the papers and pick up the vehicle. One of Wal-Mart’s biggest competitors, Costco already has a program similar to this and sells roughly 1,000 new vehicles per store per year.
Disruption against dealer networks and longstanding state franchise laws continue to evolve either through networking or through vertical integration.
Tesla Motors (now Tesla, Inc.) sells vehicles directly to consumers in a vertical integration model which goes against the auto industry standard—locally owned franchised dealerships. Tesla, Inc. sells its cars both online and in their own storefront showrooms.
Tesla, Inc. officials maintains that in order to properly explain to potential customers the advantages of their electric cars, they cannot rely on a third party dealership to handle their sales. Tesla currently has stores in 23 states and the District of Columbia. The only states in the U.S. where it has not been able to get a license are Michigan, Texas, Connecticut and Utah. Internationally, Tesla operates stores in 20 countries and sells directly all over the world.
In September, Tesla Motors filed a lawsuit against the state of Michigan stating that its law for protecting franchised dealerships is unconstitutional. Michigan is fighting the lawsuit of course.
The backlash against Tesla, Inc. continues. Just this week, Indiana lawmakers introduced a bill that would ban manufacturers of vehicles to also sell directly to consumers. The bill only applies to one automaker as of present—Tesla. The bill authors argue that auto dealerships are a better option for customers because if something goes wrong dealers can offer support.
For consumers, the vertical integration model allows less overhead that consumers have to pay for (plus sales commission) and less hassle from the cliché of swarmy sales people who also want to make you buy add on’s that are nice but perhaps you don’t necessarily need.
Prediction—someday soon we won’t even need to go to Wal-Mart or a dealer to buy a car. We will just put on a Virtual Reality headset where we can test drive any car on any road without leaving the couch. Then we meet with a virtual salesperson, work out the details, sign papers online and the car is delivered directly to our front door.
That would be some real disruption.
NMA’s Car of the Future Watch Headlines for February 2, 2017
The latest headlines from around the country on the car of the future. To see these articles and more check out the Flipboard Magazine Car of the Future.
-Government study backing Tesla is no shield to liability.
-Florida Highway Patrol releases full report of the Tesla Crash in May.
-Manhattan Institute released a report called Driverless Cars and the Future of American Infrastructure.
-Ford CEO says the future of cities has almost nothing to do with cars.
-Driverless Bus makes debut in Georgia before heading to New Orleans.
-California apparently is lagging behind driverless car regulations as compared to other states.
-Bill paves way for a driverless car fleet in Nevada.
-French Researchers are connecting cars via WiFi.
-New British study out on how long it takes for a driver to take over control from an autonomous car. (takes too long–anyone surprised?)
-Michigan is becoming the go-to place for driverless carmakers to test in winter driving conditions.
-Ohio and OSU will invest $45 million in autonomous car testing.
-Why paying for Lyft Pre-tax is bad news for Public Transportation.
-Uber and Daimler are becoming partners.
-Uber to open research center in Michigan.
-Battle between Uber and Lyft is now political.
If you find a Car of the Future Story and would like to share, send it to the NMA at email@example.com.