Sellers and automakers threatened by disruption from direct-sales rivals equivalent to Tesla or Rivian are in a robust place to struggle again in the event that they work collectively to develop aggressive gross sales processes and a wealthy possession expertise, a panel of consultants mentioned.

Talking to the Oct. 12 Automotive Information Canada Retail Discussion board: Supplier Discussions panel, Don Romano, Hyundai Canada CEO, Shahin Alizadeh, president of Toronto’s Downtown Auto Group and Michael Wyant, chief working officer of western Canada based mostly Wyant Group, every mentioned the standard franchise mannequin of dealerships can pose a formidable problem to the newcomers.

“Within the early 2000s, we wrote off Tesla as fly-by-night and I feel that was our mistake. We wrote off its direct-sales mannequin as fly-by-night and that was a mistake,” Romano mentioned. “We’ve to take a look at the issues they do effectively… and we will do it higher, however we [dealers and automakers] must work collectively in a real partnership.”

Wyant mentioned the important thing takeaway from Tesla’s success is to offer extra transparency to shoppers in pricing and within the buy course of. Such might embrace no-haggle pricing, on-line buy processes and, probably, a change to an company mannequin.

“The negotiation course of has been the most important ache level for shoppers for so long as I’ve been round,” he mentioned. “Tesla got here in with a mannequin that was full transparency for the patron, removed that ache level and that allowed them to get a foothold available on the market on high of the [EV] expertise that carmakers hadn’t bought to.”

Romano and Wyant mentioned focusing solely on direct gross sales neglects that the acquisition expertise is just a small a part of an total possession expertise, and “that relationship must be managed on the native degree,” Romano mentioned.

Which means sponsoring sports activities groups, direct involvement locally and changing into the supplier of selection for all service wants, together with adapting to fulfill the wants of shoppers, a few of whom could not have recognized that they had these wants till they noticed them from direct sellers, together with cellular service or residence pickup and dropoff.

“From stats within the trade, shoppers will not be motivated by that incentive to get them within the door,” Wyant mentioned. “Nearly half of shoppers are extra involved about what that possession expertise appears like than simply the acquisition expertise.”

Alizadeh mentioned shoppers have proven their loyalty might be fleeting, and managing that loyalty is essential to having prospects not drift off seeking a greater expertise. It’s a warning, but in addition a chance, he mentioned.

“The connection shifts between manufacturers by most shoppers as of late, and so they’re ready to surrender that loyalty for a few a long time in favour of that higher expertise,” he mentioned.

He mentioned the automakers taking the perfect strategy to modifying the gross sales course of are those that search the sellers’ recommendation on what these fashions ought to appear like.

“I simply suppose the lesson we’ve discovered during the last two and a half years, is it can’t be every other mannequin than a partnership between the vendor physique and the OEM,” he mentioned.

Wyant mentioned, for instance, a dialogue on an company mannequin — the place sellers earn a set margin on gross sales and don’t truly personal the autos — may be very simple now, when autos are on an extended ready record. However he suspects that would break down in a short time if the market will get again right into a place the place provide exceeds demand.

Romano mentioned the company mannequin has its execs and cons. “What we discover with Genesis, which is an company mannequin, is prospects simply like it. They similar to the way in which it’s accomplished.”

The con, he mentioned, is that the onus for transferring product shifts from the vendor to the producer, particularly as soon as ready lists are gone and stock is piling up. He mentioned it’s essential for OEMs to handle the provision of autos, including it’s simpler for a model equivalent to Genesis, with 5,000 to eight,000 gross sales yearly, than for Hyundai, with 150,000 gross sales in regular years.

Alizadeh mentioned the love for the company mannequin is shared by sellers.

“Having been a part of the Genesis enterprise mannequin, we discovered in a short time that it’s a superbly acceptable, completely workable and really, very worthwhile mannequin,” he mentioned. “My colleagues on the vendor facet completely like it.

“I might have completely no drawback with the company mannequin all through my dealerships.”