THE AADA J.D. POWER FEATURE SESSION: Automotive Disruption, Implications for Auto Dealers
Market disruption is a well-established business practice that we have seen succeed in many different industries, including automotive. It is coming for retail automotive, and J.D. Power is here to help you prepare and adapt.
According to US think tank ReThinkX, “the rapid, Facebook-like or smartphone-like adoption curve of disruptive technologies is driven largely by market forces. Self-driving electric car share plans, in which consumers ‘subscribe’ to a self-driving service much like they subscribe to a mobile phone plan today, will be cheaper and more convenient for many people than owning a vehicle. As a result, incumbent industries like oil, cars and transportation will face a consumer mass migration away from their old-model products and services if they don’t start preparing for the disruption now.
“There is real resistance to this process. People want to reach back to some kind of past security, and stop the process. But that’s economically illiterate,” ReThinkX concluded.
The pre-requisites for market disruption include Revolutionary Technology (e.g. Horse to Car), Viable Alternatives (Taxi to Uber, TV/DVD to Netflix), and Fundamentally Different Buyer (You versus Your Grandparents). These are the building blocks of the next quantum shift in the automotive industry. They are already happening.
The auto industry has remained largely unchanged for decades. Today, however, there are disruptors at the gate. For some consumers, the vehicle is a commodity, and disruptors like Amazon are working to capitalise on this fact.
Consumer expectations in automotive are shaped outside our industry. Consumers see how other goods and services are delivered and ask: “Why can’t my car company and Dealer do that?”
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