In 1985 Marty Macfly Traveled to the year 2015. That's only 5 years from now. And here we are in 2010 taking a look into what our business will be like 25 years from today. Tony: Hello my name is Tony Bertschi and I'm with Crescent Ford Grant: And I'm Grant Shoe with Mooresville Ford
Grant: And we'd like to introduce you to our customer in 25 years.
Tony: Based on information from the North Carolina Department of Health & Human Services, we estimate that approximately 120,000 to 130,000 of these new customers will be born this year. Grant: They will be born into a world full of what we consider state of the art technology.
Tony: Think about today’s 25 year old. He or she was born into a world of “state of the art technology”. There were video games; Cell phones, and Cassette tapes, making music more portable. Grant: You can easily see the advancements that have been made in the last 25 years. Video games play like movies. Cassette tapes were replaced by C.D.'s which in turn have been replaced by mp3 players. And cellular technology has come a long way from the brick phone.
Tony: The cell phone has gone from being little more than a novelty to an all purpose communication device. According to Pew Internet Research, 75% of teens today have cell phones, up from 45% in 2004. 33% of teens send more than 100 texts a day.
Grant: And this ability to communicate and gather information so quickly and easily is going to make our customers very impatient 25 years from now. They're going to want immediate gratification. Even more so than today’s customers already do. Tony: This will require us as dealers to adapt with and embrace new technologies so that we can effectively communicate with our customers. The good news is, advancements in communication technologies will give us the ability to target our entire customer base collectively or specific individuals with messages adapted to there specific wants and needs. Grant: For example, in his introduction, Tom pointed your attention to the prompt on the screen to text in. For all you who did, at one point during our program you will be receive a text message letting you know whether or not you are the lucky winner of a fantastic rip to New York City. But you have to be present to win.
Tony: If current technology already allows us to communicate this efficiently, imagine how quick and precise our marketing messages can be presented 25 years from now. Here is where Grant and I do some speculating. Grant: Cell phones will continue to shrink or even be combined with other items such as eye glasses. The user will answer calls texts etc. with voice activation or eye movement, and they will be able to see display messages in the lens. So, we will be able to contact them even quicker than we can currently.
Tony: Television will become more and more on demand. But since advertising revenue will still pay the bills, commercials will continue to be integrated into the viewing experience. However, viewers will be able to determine if they want all of the messages to run prior their show or be spread through out like they are today. They will even be able to put in marketing content preferences, so they only see messages that apply to their current needs. This helps us because, if we choose, we will be able to concentrate our efforts towards those viewers that indicate that they are in the market.
Grant: Whether we're right or not about the technology, We're certain that we're going to have to adapt to whatever changes come down the road in order to reach our customers effectively. Now, let’s hear from Brian and Britt who are going to share about what vehicles we will be driving in 2035
We were told that there would be jetpacks. to the moon or Mars...somewhere. So here we are in 2010 and there actually really are jetpacks, and they’re better than the jetpacks from 25 or 50 years ago, but they’re not very practical...or affordable...yet. And lets not get started on the moon. So what were we supposed to be drivingin 2010 if we aren’t flying in our jetpacks? Here in the future? Atomic powered family trucksters? Turbine powered sportscars? Eco-friendly soap bubbles that run on battery power? Yes, yes, and yes. But things turned out to be different than we thought now would back then, and in all likelihood the future will turn out to be far more interesting and bizarre than we can speculate here today. Let’s take a look at some of the possible futures of this wonderful product that is so central to all of our lives.
For all of us. And we were to use them to
Fly over to the Epcot spaceport to catch a flight to the moon or Mars...somewhere.
So here we are in 2010 and there actually really are jetpacks, and they’re better than the jetpacks from 25 or 50 years ago, but they’re not very practical...or affordable...yet.
And lets not get started on the moon.
So what were we supposed to be driving in 2010 if we aren’t flying in our jetpacks? Here in the future?
Atomic powered family trucksters?
Turbine powered sportscars?
Eco-friendly soap bubbles that run on battery power? Yes, yes, and yes. But things turned out to be different than we thought they would, and in all likelihood the future will turn out to be far more interesting and bizarre than we can speculate here today.
Let’s take a look at some of the possible futures of this wonderful product that is so central to all of our lives.
Sir Arthur Clarke was a British science fiction author, inventor , and futurist , most famous for the novel 2001: A Space Odyssey ...they made a movie out of that one.
He once said that “Any sufficiently advanced technology is indistinguishable from magic.”
He said that in 1973. What would he, in 1973, have thought of
OnStar and Sync?
How about the Volvo XC60 that can actually stop itself? or any one of the many, many cars that can now park themselves? On their own. Even parallel parking.
What about the hybrids? All of the hybrids?
There’s a Porsche hybrid now. Seriously! A Porsche hybrid! I don’t care what century you’re in, that’s magic.
In 2035 everyone will NOT be driving a Porsche hybrid. That’s good news for a lot of us. Don’t worry - they’ll still sell plenty of them. What they...or “we” (I hope I’m still driving in 2035)...what WE will be driving in 2035 will probably still be recognizable to the us from 2010. Let’s look at a checklist:
We’d encourage everyone to read a study from MIT titled “On the Road in 2035”. Due to it’s incredible length, we will not be sharing the entire contents of the report with you today - you can thank us later. The gist of the study is this: Even with the likely advances in fuel, engine and battery technology, the majority of the cars we’ll be selling in 2035 will not be hydrogen or fuel cell powered, or all electric. Although some of them will be. The MIT folks think that most of the cars on the road won’t likely be diesel either - since the emissions restrictions are likely to outpace improvements in technology.
So. These geniuses at MIT also think that maybe 15% of the vehicles on the road in 2035 are going to be plug-in hybrids. 15%. I think that number is a little low, but given current trends it looks like we’re more likely to be driving a turbocharged gasoline-hybrid in 2035 than anything else. That gives us something to work with powertrain-wise.
Aside from the reality that this car is going to cost... A...Lot. More. More than what we’d expect to pay here at the beginning of the 2nd decade of the new century - what else could we expect from our pricey turbocharged gasoline-hybrid?
Let’s talk for a minute about telemetry. OnStar, Ford Sync, Toyota and Lexus Safety Connect and BMW Assist are all available today and can track you down via satellite, GPS and the cellular networks.
Using these popular services, it is possible to have some guy in a call center in Canada run a diagnostic on your Acadia while you’re sitting in line at the Bojangles drive-thru on Independence Boulevard in Charlotte. That same guy at the call center can shut your CTS-V down if it’s reported stolen too. That’s great.
In 2035 all cars are going to have telemetry that makes OnStar look like 2 tin cans and a piece of string. The question will be how that information is used.
As revenue generated by the gasoline text falls over the next 25 years, it is reasonable to predict a likelihood of a use tax on the miles we drive in our cars. This can be accomplished by checking the odometer during an annual inspection. But what if they take it a step further and find a compelling reason to tax us based on... not just how far we drive but also on... where we drive (congested urban vs rural) when we drive (rush hour) how fast we drive and what type of emissions are coming out of the tailpipe the technology to track this data is available now and if our State or the whole country for that matter follows California’s lead on emissions standards - can they pass up an opportunity generate great big buckets of revenue? Yikes. Let’s go back to a happy place and talk about how all of this comes together in our car of the near future. Our car will not: Fold up into a suitcase Be powered by any sort of nuclear fission or fusion reaction be for sale at Wal Mart drive itself everywhere hover or fly. Sorry.
Our car will however... Cost about $2500 more than it would today Be remarkably more efficient due to a combination of technologies that are available today and regulations of the future Have standard safety features that make the cutting edge of today look like lap belts in a ‘69 Nova. Feature telemetry that will allow the transmission of massive amounts of wireless data Recognize us based on biometrics
Have access to passenger entertainment and comfort options that would seem like magic to us if we could see them today. Be likely to still run on gasoline most of the time Modular construction Feature abundant lightweight composite materials and a lot of recycled and recyclable content and most importantly - be available for sale at a franchised auto dealer And just for a second before we go - let’s bring Britt up to talk about what kind of car we’re going to be trading in on our new 2036 vehicle. Let’s hope you’ll not be trading a 2032 in and be about $2000 upside down, but I digress...
I’m Britt Maxwell with Maxwell Volkswagon. The used car market will not be going away. It is realistic to project that a lot of the cars that we’re putting on the road today could still be around in 25 years and possibly, due to the quality of the construction, be the cars we look at as a trade on our telematics enhanced expensive turbocharged gasoline-hybrid. That’s one of the reasons that this car of the future will be sold and serviced at the dealership of the future. We know what to do with people’s trade ins. They won’t know how to do that at Wal Mart - even in the future. Will it still be a challenge to get Joe Customer bought on a used 2022 Civic DX when he only has a 690 beacon score, his salary is only $100K a year, and he’s looking to finance 70% of the cars book value? Yes. Yes it will. But we’ll figure out a way to do it because even in the future people will still want to trade in their old cars on new cars even if the new cars are gadget filled pricey turbocharged gasoline-hybrids. and we’ll be there to make that happen for them. Now that you know what the car of the future will look like, let me turn it over to Stewart who will talk a little about what the dealership of the future will look like.
I’m Stewart Black, of Bill Black Chevrolet Cadillac
Vehicles of the future will be better built and require less maintenance. This is due in party by the ability to diagnose and repair vehicles wirelessly instead of bringing it in. So instead of having your vehicle serviced every 5,000 miles, it will be more like 20,000 miles. The dealership service area will consequently be smaller and more IT based. Gear-heads will be replaced by techies, as much of the work will be done via computer downloads versus the turn of a wrench.
Brian mentioned that a customer sitting in a Bojangles drive-thru of the future will be able to call in and report an engine problem. I think that is ridiculous. Everyone knows that all chicken fast-food restaurants will be shut down by 2013 after an unfortunate Double-Down catastrophe at KFC. However, it is very conceivable that a customer in the parking lot of Whole Foods will be able to call in and have her vehicle diagnosed remotely. It might look something like this.
After calling in with a problem, a display similar to this one will appear in the NAV screen area at the dealership. All diagnostic and most repair work could be done remotely.
(Video to start automatically) When a customer purchases a car of the future, a payment method will be optional so that remote repairs can be charged without the customer ever stopping in the shop….nifty huh?
Vehicles will communicate with both the customer and the service department when service is needed, syncing calendars and sending emails to confirm appointments.
25 Years from now Showrooms will be smaller. Most of the cars on the lot will be prototype cars, giving customers the ability to customize many details to their specifications. Our dealerships will also be greener.
Any new facilities built will be required to be LEED Certified, featuring water-saving faucets in the bathrooms, recycled water collection for landscaping and washing cars and reusing engine oil to heat showrooms.
Because our dealership will be smaller, many of us will be finding additional uses for our current properties. This could mean leasing the excess property out or divide it up and selling it off.
There will be less paper usage at the dealership in 2035. Most of the brochures we have grown accustomed to will be replaced by touch screens. The mountain of paperwork will be completed via a tablet. Rather than signatures, fingerprint scans will be used to reduce identity theft. Registering and titling of vehicles will be done at the dealership at point of sale.
A DMV barcode will be printed and displayed on the customers rear window before he or she drives off our lot.
Although dealerships will experience a lot of change in the next 25 years, we feel that a customer is still going to want to sit behind the wheel of the vehicle before they scan their finger on the dotted line. Another area where will see a lot of change is personnel. I’ll ask Ryan to come up to share more about that.
Because our dealerships will be smaller in the future as Stewart pointed out, we will have fewer employees as well. Not only will their be fewer employees, but the overall dealership culture will change drastically. )
The sales departments will all be more like “internet managers” connecting with customers via, email, text and social media. Conducting most of the business through technology with the exception of the “demo” drive of a sample vehicle at the dealership. Customers will want the ability to customize their vehicle, order it and then pick up the vehicle after delivery to the dealership. We feel these employees will be able to work their deal front to back, from the sale, to the financing and ending with the title work. These employees will need to have constant training, and knowledge about their products and their competitor’s products. Customers will seek quick, customized, and competitive purchases.
In the fixed operations, the advisors may possibly be appointment coordinators; to setup home, office or dealership service. Customers will be able to send problem information to the dealer through email, text or social media for the technicians to diagnose. The technicians will be trained often and with an emphasis on computer technology. They will be well rounded in gas, diesel, hybrid and electric vehicles.
According to research, Generations Y and Z are going to have different work ethics, goals and are going to need different types of management than we are giving today. They are going to require time as a benefit, and not be driven solely by money. Personal time and flexibility are going to play a role in the work ethic this generation portrays. Their strengths will be technology, multi-tasking, and overall they will be very productive employees. Generation Z is the most “plugged-in” generation we’ve ever seen. Think about it – they have never known life without a computer, internet, cell phone, or other technology that keeps us connected. One blog suggests, “The next generation will be so good at processing information that they will open doors we can only knock on today.”
Research also provides that in order to retain these employees we will have to constantly provide feedback in order to make these employees feel valued. An annual performance review alone will not cut it for these praise seekers. As employers we will have to be creative in ways to recruit this generation, while giving them ongoing challenges and continuing to make them feel valued. Now let’s turn our attention to the manufacturers. Tyler will come and share what we anticipate on that important front.
Hello. I’m Tyler Johnson with Mike Johnson Hickory Toyota.
“ In business, anytime that you can create change, you create value” – Vinod Khosla- Venture Capitalist
The auto industry anticipates more change than most industries. Automotive companies that have historically managed change the most successfully, directly reflect that of the financial leaders!
Where Will The Change Come From? Manufacturer’s Relationships: With Dealers, consumers, and other business sectors, etc…
Technology , economic conditions , and consumer trends will and are playing a major role in the changes in these relationships.
As you heard from Grant and Tony, the information age consumer is more connected than ever and trends show that it will continue to increase. This opens the door for Manufacturers to directly connect to the consumer, rather than rely solely on the dealer. However, collaboration between the dealer and the manufacturer will be critical!
How will the manufacturers react? After the sale opportunities arise to stay connected, as well as more targeted marketing efforts. The Manufacturer can take advantage and heighten the ownership experience of their customer to create brand loyalty. Keeping their customer will be more important than ever!
For the rapidly changing consumer, some believe online purchase of a car is more than just a possibility. Whether they are buying direct from the factory online, or utilizing sales outlet powerhouses like Wal-Mart or Google…there is a chance they won’t be buying from a traditional brick and mortar dealer. Another potential but lesser discussed trend is Vehicle Sharing: This is already growing in popularity in the US. This new model opens the door for manufacturers and new outside companies to enter our industry by offering the consumer access to a garage of vehicles to satisfy a variety of uses, a transportation time share of sorts. Increasingly popular in larger cities and on college campuses, predisposing the next generation to alternatives that eliminate the need to buy a car. Includes IPhone applications to find the car nearest to you.
A joint venture between Renault-Nissan and California based Project better Place(PBP) is piloting a system in Israel, Denmark, and Portugal where consumers buy an electric car and pay a monthly fee based on the miles driven much like cell phone minutes. PBP provides the batteries and the recharge infrastructure and Renault-Nissan provides the cars. They estimate that the cost of operating an electric car to be cut in half. In Israel, they expect to be serving 100,000 consumers by the end of this year! Technology is driving change!
A majority of manufacturers are already planning MAJOR collaborations with external partners in the near future. Ex: Ford’s collaboration with Microsoft Sync. Could Apple follow suit with say Toyota? Could Apple’s influence in Japanese markets make that a compelling strategy? Overlap among the automotive industry between companies like telecom, electronics, media and entertainment, and energy companies are likely to yield entirely new types of business models. Who is next to join with the manufacturers? How will it effect our business?
Although customers yearn to be more connected and are changing rapidly, manufacturers seem to be focused elsewhere. Manufacturers are poised to only increase investments on the informed and collaborative customer by 2% vs. a 22% increase in other industries. A 30% increase in investments are going to capitalize on the heightened purchasing power in growing economies.
What will the impact of these developing economies have on the U.S. auto market? Experts expect China to rival the U.S. auto market by 2015. India is expected to be in the top 10 by the same time. What will North Carolina Dealers do to connect to the information age consumer? How will we manage the manufacturer’s relationship with dealers? Will we manage the change or let the change manage us?
You have heard a lot of speculation today – some based on research, some on trends, and some just on gut feeling. The question now is – how will we respond? Knowing that the vehicles of the future will be serviceable in many instances from a remote location, are we prepared to position ourselves now so that that those repairs still originate from our dealerships, versus the manufacturers headquarters or a third –party supplier in a third world country? Considering our dealerships will be smaller, are we ready to discuss today what to do with our existing properties when they are not viable tomorrow. Are we prepared to address how we are going to keep a constantly changing workforce trained on constantly changing technologies in our vehicles? And are we prepared to demonstrate to our customers why buying a car from our dealership is preferable than having it shipped directly from the manufacturer. As you walked in this morning, a song by Brad Paisley called “Welcome to the Future” was playing as you found your seat. We picked that song because in many ways the future is already here. To illustrate that, we want to share this last clip with you. Tyler – sits down
(Tom Burton comes up.) I don’t know about you all, but I’m extremely impressed. NCADA is doing something very special with the presentation we just saw. It will be stored in a time capsule, along with some other mementos from this 75th anniversary week. At NCADA’s 100th anniversary, these young dealers (who won’t be young dealers anymore) can see how close they got. I’d like to call up Neal Davis with SBGnet to help me announce the winner of the New York City trip. Congratulations to ____________________ of ___________________. Thank you Neal for donating this great prize. Now I’d like for those Young Dealers who served on the Dealership of the Future Task Force to stand, we want to give you a hand. ….. I am confident that the automobile industry in North Carolina is in good hands and I look forward to seeing what you are able to accomplish over the next 25 years.
<ul><li>Car of 2035 Will: </li></ul><ul><li>Cost about $2500 more than it would today </li></ul><ul><li>More Efficient </li></ul><ul><li>Cutting Edge Safety Standards </li></ul><ul><li>State of the Art Telemetry </li></ul><ul><li>Recognize us based on biometrics </li></ul>
<ul><li>Car of 2035 Will: </li></ul><ul><li>Unprecedented Entertainment and Comfort options </li></ul><ul><li>Gasoline </li></ul><ul><li>Modular construction </li></ul><ul><li>Lightweight. Recycled and recyclable content </li></ul>
<ul><li>The Dealership Facilities of 2035 </li></ul>
<ul><li>Facilities: Service Area </li></ul><ul><li>Smaller </li></ul><ul><li>IT Based </li></ul>
Disconnect Although customers yearn to be more connected and are changing rapidly, manufacturers seem to be focused elsewhere.
Economic Conditions <ul><li>What will the impact of these developing economies have on the U.S. auto market? </li></ul><ul><li>What will NC dealers do to connect to the information age consumer? </li></ul>
<ul><li>Preparing Today for Tomorrow </li></ul>
Young Dealers Group Task Force Members Tony Bertschi, Crescent Ford, High Point Stewart Black, Bill Black Chevrolet, Greensboro Ryan Brown, National Dodge VW Subaru, Jacksonville Tyler Johnson, Auto Development Group, Hickory Britt Maxwell, Maxwell Volkswagen Inc., Burlington Brian Musgrave, Subaru South Blvd, Charlotte April Porterfield, Crescent Ford, High Point J. Grant Shoe, Mooresville Ford, Mooresville Alycia Tomazic, Moore Buick Pontiac GMC Truck, Jacksonville Chris Vester, Vester Honda, Wilson
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