Is the Car Dealership Model Outdated?
And, of course, both scenarios still require the cars to be maintained and repaired. And let’s not forget Tesla. Sloan says Hyundai showrooms, in particular, are already accustomed to their customers’ expectations of a streamlined buying process. Tesla is an interesting case, because at the time of the Model S rollout, the company sold vehicles in relatively low volume, and these expensive, fully electric cars tended to attract buyers who were open to a different kind of experience. Even when it becomes more common to buy a car online from start to finish, most people will still want to see that car before signing on the dotted line. The electric car company from California made waves when it released its first mass-market vehicle, the Model S sedan.
Tesla owns its own showrooms, instead of using the traditional franchise model. Customers can visit a Tesla showroom to check out the cars and go for test drives. The Tesla showrooms will place orders for cars, but a lot of Tesla customers buy their cars online after driving them. This model actually got Tesla sales banned in Texas, since state law dictates that only third-party sellers (that is, franchisees) are allowed to sell cars. Such laws are common, but Texas got a lot of attention for its 2015 attempt to slow Tesla’s roll.
Starting in November, the luxe sports car company will begin offering Porsche Passport, a new subscription-based app for residents of metro Atlanta. Porsche is partnering with Clutch Technologies, which already offers third-party subscription services in some areas. Porsche Passport isn’t cheap – it starts at $2,000 a month – but it’s an interesting new way to drive a car without buying one. Dave Sloan, the president of the Chicago Auto Trade Association, says franchise car dealerships will just roll with the punches, as they’ve always done when there have been cultural or technological shifts. Of course, these two announcements definitely don’t signal the death of the traditional car-buying process.
In short, car buyers might be excited that changes are coming to the stressful and time-consuming experience of buying a car, but that excitement might be premature. However, if these strategies from Hyundai, Porsche and Tesla prove to be successful, they could eventually be adopted by other automakers. And South Floridians can sign up for Revolve, another subscription car service that includes cars from Jaguar, Tesla, BMW, Mercedes-Benz and more. Cadillac also offers a subscription service for New York City residents that costs $1,500 a month.
