The second part of the Industry Overview featured Dr Marco Hecker, Auto Sector Leader, Deloitte China, who examined the evolving automotive landscape with an automotive-sector strategic focus.

The global automotive ecosystem is embarking on an unprecedented period of change, with the ever-increasing digitalisation of processes, the changing customer experience expectations, the tightening of operational gross levels across businesses, and the evolution of product with the introduction of electric vehicles.

Acknowledging the “dramatic” impact of COVID-19, Dr Hecker discussed the shifting profit pools within the industry’s value chain and this impact that this will have on Dealers. The industry futurist explored how Dealers should be preparing to take advantage of shifting market conditions and CASE (Connectivity, Autonomy, Shared Mobility, and Electric) trends, and the opportunity ahead of Dealers when embracing the change.

“Nevertheless, there were a couple of lessons learned, and a couple of changes that will persist, post-COVID, and it’s important to understand what the consumers really want and how that impacts the Dealers,” he said.
One of those changes is the preference for omni-channel interactions.

“Consumers are really expecting online and offline to be seamlessly integrated,” he said. “So for the Dealers this means that they need to create that kind of seamless integration. They need to offer diversified distribution channels, and they need to look into new ways of getting into that kind of channel interaction with their clients.

“In addition, the traditional service availability has to go up. Expectations are so much higher and the whole element around online will become more and more important.”

Dr Hecker emphasised the importance of customer experience and the individualised “journey” they undertake with a dealership.

“We can’t just force our customers to follow a certain procedure. We have to be able to adjust ourselves to the needs of the customers and give them an integrated experience on-brand, not only about selling your vehicle. It’s about lifestyle, it’s about taking the interests into consideration of the consumers and be able to offer a greater variety of brand offerings,” he said.

“We need to be able to communicate across the life cycle and across the ecosystem. Not only across the different channels, whether it’s through app, online, or in the dealership, but it’s also having branded messages with some of the partners and where the consumers are, to reinforce that kind of experience.

“That retail experience needs to be personalised, so it’s really a segment of one: ‘I don’t want to be treated like everybody else. I want to get the information that I want, wherever I am in my current life or buying cycle’.”

Another change was consumers’ desire for “more perceived value”. Given the uncertainty of the economic climate, price sensitivity was here to stay.
“On the other hand, the quality of service is a key differentiator, and trust and the relationships that you have built over time really makes the difference,” Dr Hecker said.

“Nevertheless, we need to think about how we improve operational efficiency in order to exceed the customer expectations. Think, for example, about flexible maintenance and servicing infrastructure, but also think about streamlining all your operations in that regard.”

Dr Hecker said OEMs were all taking these trends into consideration, but were dealing with them differently, so it was important for Dealers to understand how CASE was impacting the market. He said the Australian market was not isolated and the reality of CASE was coming to Australia as well, so Dealers had best be prepared.