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Tesla Direct Sales Model Brings Unlimited Possibilities Vs Traditional Car Dealership System

by Eva Fox April 12, 2020

Tesla Direct Sales Model Brings Unlimited Possibilities Vs Traditional Car Dealership System

For many years, dealerships are struggling with Tesla’s direct sales model, but the current situation of COVID-19 forces them to admit that Elon Musk’s approach is an excellent idea. Due to the coronavirus pandemic, the worldwide car sales have declined significantly, but there is something can help in this situation.

Dealerships, show rooms and stores of all the automakers are now closed in accordance with the quarantine conditions. Customers also cannot and do not want to visit crowded places. Therefore car dealers have to adopt the model of the online sales from the leader of the electric vehicles maker, Tesla.

Tesla is already using the contactless test drive and delivery, the company's service centers also serve cars without direct contact with the owners. Therefore, the California automaker has become the best example for car dealers.


According to USA Today, changes have already begun and car dealers are preparing to switch to the online sales model.

“This is going to fundamentally change how people view buying a car,” said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio, and chairman of the National Auto Dealers Association about the current approach to car sales.

“By the end of this year, you’re going to see 80% -90% of U.S. new car dealers with full e-commerce capability in their shops ”to handle everything online but the test drive and - maybe - the final signature, he said. Online sales at Ricart’s domestic dealerships have doubled during the last six weeks, he said.

In Michigan, car dealership employees who are required to facilitate remotely and electronic sales or to rent and deliver vehicles to customers, provided that the exhibition halls remain closed are allowed to work. Deliveries can begin as soon as they have developed a process that applies to all legal documents that are part of the purchase of a vehicle.

“We’re seeing a fundamental change in the way cars will be sold,” said Doug North, owner of North Bros. Ford in Westland and chairman of the North American International Auto Show said that this pandemic is going to create some permanent changes.

Switching to online sales will require changes to laws that require physical signatures. But North believes the government is open to the idea, especially at a time when tax cuts on car sales increase the burden on public finances.


Source: Forbes

At the moment, some car dealers have already begun to offer the opportunity to reserve a particular vehicle for purchase or test drive. “People are changing their buying habits. Online platforms are as important as brick and mortar,” said Ryan LaFontaine, chief operating officer of LaFontaine Automotive Group.

North described a process in which a buyer might come to an empty dealership to sign for a car they'd picked, priced and financed online: "Everything they touch will be freshly disinfected. If the customer uses one of our pens, they ' ll take it with them when they leave.”

Two out of three customers care even more about the time it takes to buy a car - particularly negotiating price and signing paperwork - than how much they pay, according to a recent survey by Cox Automotive, which owns the Autotrader and Kelley Blue Book buying websites . The report said customers spend an average of three hours at a dealership to buy a car and 2½ for basic maintenance. The biggest consumer frustration with the auto experience relates to time and convenience, Autotrader senior analyst Michelle Krebs said.

Tesla's sales model clearly reflects the global trend. People are no longer wanted to spend several hours in the dealership. As experience shows, this is really a waste of time and resources. As it turned out, Tesla is far ahead of time both in terms of its products and in the sales model.

Featured image: Expressandstar




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