The disruption in traditional automotive retailing makes it vital for Dealers to evolve their business and include innovative programs for customers, such as the ones offered by today’s disruptors.

In a thought-provoking session at Digital Dealer 25, Kevin Frye, ecommerce Director of the Jeff Wyler Automotive Family, explained how Dealers can use ‘self-disruption’ by getting in on the growing subscription model of automotive retailing.

Named by Automotive News as one of the top five influencers changing the auto industry today, Mr Frye has been a leader in auto subscription, Google Analytics, augmented and virtual reality. Jeff Wyler Automotive Family is one of the top 50 dealership groups in the US.

Mr Frye’s session explored the ins and outs of implementing programs like auto subscription, which offers affordable, flexible mobility solutions to customers. He explained the range of subscription services offered by OEMs, as well as from the Dealer side.

His view is that subscription is a ground-breaking transportation model with the potential to change the future landscape of automotive.

A leader in auto subscription, Mr Frye explained how Wyler FastLane operates, as well as which OEM auto subscription programs are available in the US. He shared testimonials from current subscribers and presented the case that the auto subscription model can best meet the flexible mobility solutions that future consumers desire.

“Self-disruption is the best solution to disruption to traditional automotive retail,” he told his audience.

“We must become more consumer-facing – that is the reality of every successful business today.”

Mr Frye said Dealers should provide a personalised consumer experience that is flexible and affordable.

“Self-disruption combined with strong leadership is the answer to our future,” he said.

Some of the factors he put forward in favour of the subscription model include:

• Real income is lower these days
• Housing expenses are higher than ever before
• With no choice on taxes, and mortgage payment taking priority, transportation gets whatever is left over
• Providing affordable transportation is key.

When people buy a car, most are making a sacrifice. A long-term investment in one car is inflexible, while auto subscription provides affordable and flexible mobility solutions. A month-to-month payment provides access to an entire garage of vehicles and includes insurance, maintenance, taxes, personal concierge and roadside service. Subscribers can choose the perfect car for every occasion.

Subscription programs already in place in the US include Wyler’s FastLane, Audi On Demand in San Francisco and Porsche Passport in Atlanta.

Book By Cadillac operates in Los Angeles, Dallas and New York, and provides the option of up to 18 exchanges per year. Canvas is a used car subscription service available in San Francisco or LA, with terms from 1to 12-month terms.

Fair is a program that enables users to be instantly prequalified for loan or lease and return any time after five days’ notice. Fair doesn’t own the inventory – the Dealers do.

The pros and cons of subscription models

Pros

• Greater selection of cars with Dealers
• Dealer programs are more flexible, with most having unlimited exchanges
• OEMs are better positioned to manage fleet and inherent risk.

Cons

• OEMs are limited to their brand for selection
• OEMs are less flexible, as most have limited exchanges
• Dealers carry higher risk by owning and managing fleet.

Subscription models require a change in behaviour by both Dealers and consumers. We have seen that the modern consumer is ready and willing to adapt to new ways of doing things. As Dealers, we must be open to change too.