A small group of AADA delegates attended International Dealer Day in Verona, Italy, in May. All enjoyed themselves immensely and came home with valuable take-aways to apply to their businesses.

The main lesson of the event was the difference between Baby Boomers, who sustain the long-established model of dealership sales, and Millennials, the young adults who are changing traditional concepts of ownership and rejecting much of what Dealers have come to take for granted about their customers.

A survey of Millennials presented at Dealer Day found that 41 percent believed owning a car was not necessary. A startling 67 percent said they would rather have a mobile phone for a year than a car. Nearly half (47 percent) wanted self-driving cars by 2025.

As well as what they want, how they get it was just as revealing. A massive 82 percent of Millennial shopping is done online, without setting foot in a showroom. The message for Australian Dealers was loud and clear: lift your online game or Millennials will pass you by.

Only 17 of the 4,002 Millennials surveyed said they liked the process of buying a car as it is today.

Their top frustrations:

  • Filling out the paperwork/contracts – 25 percent
  • Negotiating a price – 23 percent
  • Waiting 10 minutes or more for a test drive – 23 percent.

Baby Boomers are keeping the current industry model alive, but they are not the future. The average Millennial visits 10.1 websites in their vehicle search. If you don’t have an engaging website, something that can trap them and stop them, how are you going to be the person from whom they choose to buy a car? What makes you different? Because if it is only price – which has typically been the Australian mentality – what chance do you have?

JD  Power’s VP Global Retail, Charles Mills, spoke about the importance of embracing technology and putting the right people in place to drive it.

You can have all the innovation, all the technology, but if there is no-one driving it, if dealerships don’t have a culture of seeking engagement with customers and the technology that drives it, they are wasting their money and time. It is crucial to deliver a customer experience that puts the dealership at the top of the purchase ladder, because people buy from people they like, who treat them well.

Industry drivers: Dealers or OEMs?

Dealer Day highlighted the difference between the US market and those of China and Europe in terms of who drives the market. In the US, as in Australia, it is Dealer-driven, while in China and Europe, it is much more OEM-driven.

In Australia and the US, the real investment in the success of these brands comes from the Dealers, and therefore the control is with the Dealers. In Europe and China, the OEMs dictate to the Dealers what they can and can’t do. In Europe, OEMs are selling cars online, competing with Dealers. In China, the biggest car market in the world, the industry is still burgeoning and the OEMs have it by the throat.

One thing that stood out was the OEM involvement in the event. On the Expo floor there were nine brands represented. The OEMS are very involved and supportive of the event and Dealers in general. It is a similar story at the NADA Convention. Yet AADA can’t get a factory to support our event. It is an issue.

Cyber-cars a worldwide issue

As we have in Australia, so does the Italian market have an issue with cyber-cars. Instead of Dealers reporting cars as sold, as is often the case here, over there it is OEMS redirecting new cars into rental fleets. While attending Dealer Day an AADA delegate rented a brand-new Opal (400km on the clock) for $12 a day. Why would a Millennial buy a car when he or she can rent one for $12 a day?

The Expo

The Expo was interesting. It is not as broad as the AADA or NADA Expo, with fewer exhibitors and no catered events. However, with exhibitors all offering food for delegates, it was possible to have your daily meals catered for without leaving the Expo floor!

The international presence was high. NADA Chairman, Mark Scarpelli, attended, as did the French, Russians and other international Dealer associations. It was an excellent and informative event. AADA will return next year and urges Dealers to come along.

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