Wes Lutz lives in what he considers to be a “relatively rural area.”
So the president of Extreme Chrysler/Dodge/Jeep, RAM in Jackson, Mich., owns a car that gets him where he needs to go. But when Lutz drives that car to another home he has in downtown Chicago, he keeps it parked and takes an Uber around the Windy City.
“Ridesharing isn’t replacing my personal vehicle. It can’t! But it’s adding to my options. So I don’t look at it as an either-or proposition, and I don’t think my customers do either,” Lutz said in an emailed Q&A with Auto Remarketing.
“I think a variety of options are going to coexist. The future, in my opinion, is going to be a combination of vehicle ownership and ride sharing,” he said. “It’s not going to be one or the other.”
Lutz, who is the 2018 chairman of the National Automobile Dealers Association, said this story is emblematic of how consumers typically approach vehicle ownership these days.
And that’s something he chats with them about when they visit his dealership some 30 miles from Ann Arbor, Mich.
They’re not trying to get rid of their cars — but there are other vehicle access options when they need them.
“The consumer is ultimately going to decide what the future looks like, but right now I don’t see any indication that consumers are looking to change the current ownership model,” Lutz said. “And I ask customers that question all the time when they’re here.
“My interaction with our customers tells me over and over that they’re just not ready to share their vehicle, and they’re definitely not ready to give up their personal vehicle. Will that change? I think things are going to keep evolving, and that evolution will lead to greater and greater options,” he continued.
“Uber and Lyft are penetrating more and more rural areas. That’s allowing options where they didn’t exist previously. But that doesn’t mean it’s always going to be more convenient to use a ridesharing service even when it’s available and affordable.”
Dealers ready for change, prioritize consumer advocacy
The ridesharing usage Lutz talks about is just one component to an automotive landscape that is being changed by technologies in purchase, ownership and usage methods (digital retail, ridesharing, car sharing, subscription services) as well as tech within the vehicles themselves (autonomous vehicles, electrification).
And, of course, there is overlap.
One area on which NADA has its eye is how the government and auto industry reacts to some of these developments in mobility.
“The ways in which the government attempts to regulate the development of autonomous vehicles, promote ridesharing services and push electrification into the market are going to be huge,” Lutz said. “And that’s because, in my view, neither the industry nor the government has a good pulse of the consumer on this. I think they’re misreading the public’s willingness to give up their vehicle, give up control of their vehicle and give up really efficient and affordable internal combustion engines.”
But he emphasizes that dealers are not resisting this technological change, calling it a “wonderful and incredibly important” development.
“But I think we’re going to be a really important advocate for the consumer as these things unfold, because we’re already seeing a tendency for the government and the industry to get way out ahead of what the average consumer wants in terms of autonomy, ridesharing and electrification,” Lutz said.
“Our job at the end of the day is to serve our customers and provide them with mobility no matter how they want it, where they want it or what it looks like. We’re really agnostic as to what that product is,” he said.
“But I’ve got to tell you, the balance between what the government wants consumers to have and what consumers actually tell us they want is getting out of whack, and it’s only going to get worse. So I think we’re going to be a critical advocate for the consumer, even more so than we are now, going forward.”
‘Long way off’
Another wrinkle in the mobility scenario is that that the true impact from such trends as greater electrification, autonomous vehicles and ridesharing on dealership sales and operations could be further down the road, Lutz said.
Though he certainly is watching them.
“Now, I think we’re a long way off from having these things in the marketplace in significant numbers,” he said. “But at the federal level, we’re passing laws and writing regulations now that will set the table for the deployment of these types of vehicles in the future, so dealers and NADA need to be engaged on these issues, and we certainly are.
“I’m excited about being one of the dealers who gets to figure out how this is all going to play out.”
His take on digital retail
One area of the auto tech revolution that is already playing out — and has been, for some time — is digital retail and ecommerce in automotive.
Like the approach to increased mobility options, Lutz welcomes the opportunity.
And similarly, he and other dealers have prepared and adapted to the changes brought to the retail environment from ecommerce/digital retail platforms.
“I think these all of these platforms provide great opportunities for dealers to do what they do best, which is develop strong relationships with their customers,” Lutz said.
“The reason dealers are embracing digital retail is because they recognize that the Internet is simply a medium for dealers to build and maintain better and stronger relationships with their customers by communicating with them on a platform they might be more comfortable using,” he said.
“My dealership has always been very progressive digitally,” Lutz said. “In the late 90s and early 2000s, we were told to prepare for the demise of the franchise system because the Internet was going to put dealers out of business. Instead, we sat down and sifted through all that information and, at the end of the day, we harnessed the power of the Internet to be productive for us,” he said.
“We didn’t fight it. We said: ‘Look, there’s some great things here that can help us serve our customers better.’ And I think we got better at serving our customers because of that technology. I think we have a similar opportunity today. We just have to figure out how that’s going to happen.”
In a way, that has begun to take shape.
Various third-party providers offer digital retail solutions that help facilitate sales online or provide ways the consumer can transact with the dealer online.
Some online retail platforms have brought dealerships into the fold.
Many dealers, as the world around them changes, have taken proactive measures to make the most of these online retail opportunities.
Adapting to change, particularly the tech variety, are perhaps what dealers like Lutz do best.