Top Execs Tell Dealers Not to Panic About AV/EV Tech

A NADA Show Hot Topic

By Desiree Homer

Top executives are telling dealers not to panic about the explosion of autonomous and electric vehicle technology. Henio Arcangeli Jr., senior vice president of American Honda Motor Co., told a dealer meeting that there’s still time for retailers to embrace the trends and adjust their business strategies accordingly. Rhett Ricart, chairman with the National Automobile Dealers Association, spoke reassuringly about industry disruption and transformation due to AV/EV technology, at the NADA Show in Las Vegas. If the executive level is optimistic about the changing automotive landscape, should you be as well?

In Case You Missed the 2020 NADA Show

When the NADA Chairman uses his introductory address to offer calming sentiments about AV/EV trends to a captive audience of dealers, you know it’s a topic on everyone’s mind right now. This technology goes beyond launching new models. Independent companies are emerging, and along with them, how retailers engage consumers is on the verge of change too. The industry shift was well represented in Las Vegas, Nevada this past week at the NADA Show, as many exhibitors and speakers discussed the current EV trends. Rhett Ricart set the tone in reminding dealers that the franchise system itself is the most sustainable distribution network in the U.S. He also cites that while disruptors and technologies will come and go, the constant is “you and me, the dealers.” After all, who better to fix and service the autonomous or all-electric cars of the future than the “tried and true service department.”

The Executive Perspective on AV/EV Profitability

Henio Arcangeli Jr. also spoke at the NADA Show this year. He previously addressed members of the American International Automobile Dealers Association during a luncheon, offering similar advice to that of Rhett Ricart. Arcangeli tells members it’s important not to panic, despite the headlines, state-level lawsuits, and emerging start-up competitors. Instead, Arcangeli says, reposition your thinking to take a “larger share of the business that’s out there.” The electrification of vehicles has inspired fear at the dealership level. EV’s will need less service than traditional combustion vehicles. Arcangeli responds to these notions, reminding dealers that the electric transition won’t affect profitability, but instead will just change how dealers are needed. These battery-powered rides won’t need oil changes, but they will still need tires, brakes, and software, for example.

AV/EV Vehicles May Help Dealers Compete with Third-Party Shops

Vehicles are becoming more connected and automated. Even while consumers are keeping their cars longer, these electronic enhancements will continue to need to be serviced, repaired, or upgraded. The third-party repair facilities and mechanics may not be equipped with the tech and software tools required to make these repairs. Henio Arcangeli Jr. points out an all-electric movement may offer a unique opportunity for dealers to compete with these independent mechanics, as customers of these vehicles will need the dealership service drive. And, they’ll need you well beyond the present, three-year new car timeline.

If the executives aren’t worried, and actually more optimistic about the explosion of autonomous and all-electric technologies, it should reassure dealers. The market may change. The technology will change. However, transportation needs won’t change; only the methods in which consumers do so will. So, don’t panic. They will still need dealers, parts, and service. They may just need you differently in the years to come than they do now.