The automotive industry pumped the brakes hard in the early months of the global COVID-19 pandemic. The effects began in China, where sales plunged 71 percent in February 2020; by April, sales had dropped 47 percent in the United States and dived 80 percent in Europe. But the industry’s engines never stopped running, and cars and trucks have come roaring back. From the third quarter of 2020 through the first quarter of 2021, automakers around the world have seen rapid (and in some cases, record) levels of production. As with multiple industries across geographic regions, the pandemic has brought a great acceleration of the trends across the mobility value chain that were building before it occurred.
Consider car and truck buying. Even before the pandemic, consumers could explore vehicles online to compare prices; experience virtual, 360-degree views of the vehicle; and visit carmaker websites to “build their own cars.” Those features were available even as in many countries, including much of the United States, the actual sales process itself was required to take place at car dealerships. During the pandemic, when dealerships around the world scrambled to meet evolving in-person restrictions, the technology proved invaluable. Some dealers closed their sales floors to the public and engaged with customers over the phone, via videoconference, or by special appointment only. Potential buyers could also take advantage of sites and apps that helped them explore and arrange related services, such as financing and insurance, remotely and virtually as part of the car-buying process.
Even so, as the pandemic-related restrictions have eased in some areas, customers have flocked back to dealership floors. Many people still want to interact with a dealer and to see, feel, sit in, and test-drive their vehicles before buying them. For now, different platforms, both physical and virtual, are existing side by side, simultaneously complementing and competing with one another. Tesla in particular, along with other fast movers such as Porsche, Volkswagen, and Volvo, is at the vanguard of selling by means other than a dealer showroom. Other automakers around the world, even those with strong, legacy dealer networks, are experimenting with new dealer- or manufacturer-led models for selling and servicing vehicles. Still, to paraphrase Mark Twain, reports on the death of the dealership model have—so far—been greatly exaggerated.