GRAPEVINE, Texas–A journalist who has spent his career covering the automobile industry has offered his thoughts on what’s ahead for that market and for credit union/dealer relationships, as well.
Jim Treece, retail news editor with Automotive News, told attendees at CU Direct’s Drive 18 conference here that while there was discussion during the meeting that concept of car ownership will eventually disappear in favor of subscription services, he doesn’t believe the manufacturer model will ultimately prevail.
“Maybe a fraction of market wants to flip from Porsche to Porsche to Porsche,” he said. “But if you take a dealership model, that’s different. I could see myself going to a dealership model that has eight brands, so I can have access to number of different vehicles. That would appeal. A lot of dealerships out there beginning to experiment with how this would work. What size fleet? How to price? No one has figured it out yet, but someone will, and I would keep my eye on that.”
Treece said what both dealers and credit unions need to be watching is the changing consumer.
“Consumers more and more comfortable doing a lot more online, whether it’s Amazon or Rocket Mortgage. So, I think it’s fair to say a Millennial who can get a mortgage in two hours online is not going to want to spend two hours in a dealership.”
Treece said both credit unions and dealerships have a model at risk as the market changes, and they need to work together. He said he sees two ways of better partnering.
“The first is the technology angle,” Treece said. “You can figure out your trade-in’s exact value or figure out payments down to the penny, including local taxes. So, what are we doing to improve the consumers’ experience online. Second, there is the partnership angle. If these (auto dealers on panel) are your partners, they need to understand your business and you need to understand theirs. People will buy a service contract for a dishwasher, but balk at buying one for a $30,000 vehicle they are going to abuse every day of the week. And yet the average U.S. household cannot handle a $400 emergency expense.”