PA’s Tim Lawrence, Global head of manufacturing is quoted in an article on the choices customers will make when they buy and use autonomous, connected, electric and shared (ACES) vehicles. This will also have big implications for OEMs and their logistics.
The article looks at direct-to-customer sales which takes the vehicle to the customer’s home for a test drive and to answer their questions before passing the order on to a dealership for fulfillment. Tim suggests that while direct-to-the-customer sales models are likely to grow in the coming years, vehicle sales are unlikely to become completely virtual. The most probable evolution, he suggests, is a mixed model, where customers can choose to place orders online or in a dealership, according to personal preference.
Tim explains that for vehicle logistics, such models may require only limited changes to current arrangements: “Today, dealers place an order into the factory, or look for a suitable model in the stock pipeline. Online ordering can work the same way.”
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In Europe and other markets, OEMs hold vehicle inventories in national or regional hubs, where they also carry out pre-delivery inspection (PDI) and preparation. Tim explains that such networks would already able to handle direct deliveries: “In terms of the main physical logistics locations, there won’t be much change as you move to an online model. You may have customer pickup points, rather than the dealer itself. But most likely there will be delivery to the home.”
This won’t be that straight forward for OEMs, dealers or logistics providers. Tim says, for example, with self-service ordering, dealers may lose the chance to persuade customers to add options to their cars at the time of purchase, an important boost for manufacturer (and dealer) margins. Tim adds: “This is an area where OEMs have more work to do.”
“That upselling will have to become part of the sophisticated configuration and buying process,” he says. “They’ll make offers to you as you go through the configuration process.”
The article concludes by looking at vehicle ownership. Tim says: “Already, today, people don’t really buy cars. More and more they are leasing a car in different forms.”
He notes that 70-80% of sales today in the UK are based on personal contract plan arrangements. Once customers are comfortable with the concept of paying a fee every month to use a vehicle, they may consider different ways that might be done.
“You could pay for access to a range of vehicles, or models around fractional ownership or rental, all the way to the Uber model of taxi-like service,” says Tim. “People are also considering ‘Air BnB’-type models, where an individual owns the car, but rents it out to others.”