As it turns out, dealers are more likely than the shoppers buying their cars to believe personal vehicle ownership will decrease drastically in the next five years.

But does this mean that dealers are worried about the impact this will have on their business? Not necessarily.

According to a study by Cox Automotive, the overwhelming majority of dealers don’t envision the increase in mobility solutions slowing down their business. Quite the opposite. Many consider it a complement to their existing retail businesses.

That said, despite nearly three quarters of dealers saying this is not the death of brick-and-mortar, over half said a decade down the road, there won’t be the need for as many dealerships as there are now.

These findings were part of the “2018 Cox Automotive Evolution of Mobility Study: A Dealer’s Perspective,” continuing the company’s mobility series launched this summer.

 “Dealers are approaching the evolving mobility landscape with their eyes wide open,” Cox Automotive Mobility president Joe George said in a news release accompanying the study.

“While traditional car ownership isn’t going away anytime soon, we’re focused on enabling dealers with innovative consumer mobility and shared fleet service solutions to keep their businesses relevant,” he said.

Traditional ownership decreasing?

Forty-seven percent of the 430 dealers that Cox Automotive surveyed (which included both franchised and independent dealers) said the average household will own or lease fewer vehicles a decade from now.

Thirty-five percent of dealers believe that a decade from now, consumers’ primary mode of transit won’t be a car they personally own. And 28 percent believe that will be the case five years from now, according to the study.

That line of thinking is even more prevalent than it is among consumers: 18 percent of consumers think that in five years, their primary transportation source will not be a car they own.

Dealers are also betting that consumers will become even more accepting of ownership alternatives over the next decade.

Breaking it down by usage type, the Cox Automotive data shows that:

•  Forty-six percent of dealers believe ride-hailing usage will grow significantly, 41 percent say it will be up slightly and 13 percent don’t expect it to grow.
•  As for car-sharing, 53 percent anticipate slight growth, 28 percent project significant growth and 19 percent don’t see growth.
• For subscriptions, the numbers are similar to car-sharing. Fifty-four percent of dealers believe it will grow slightly, 28 percent see significant growth and 18 percent anticipate no growth.
•  Next, 47 percent of dealers say autonomous vehicle usage will climb slightly a decade from now, with 34 percent eyeing significant growth. Nineteen percent don’t envision growth.

‘A resilient, adaptable and optimistic group’

Dealers don’t appear to be turning and running from this new age of mobility, either. 

Three quarters of respondents find it beneficial to offer car subscriptions or car-sharing to their customers, according to the Cox data. 

The study also listed 10 motivators for dealers to provide such services, and topping the list were “to create new revenue streams” and “to appeal to a new consumer base.”

“American car dealers are a resilient, adaptable and optimistic group. They’ve rode out roller-coaster economies, endured a constantly evolving business, even the demise of brands they represent,” Autotrader executive analyst Michelle Krebs said in commentary provided by Cox Automotive.

“They routinely take risks, regularly embracing new franchises and opportunities when they become available. Successful dealers likely view the world of new mobility through this same lens — they see opportunity to serve customers in new ways.”

The study goes on to mention that those reticent to jump into the car-subscription or car-sharing game are largely averse due to unanswered questions – i.e. how do you set it up? – not because they don’t like the model.

And it appears dealers don’t see the various forms of mobility threatening their business.  Many see it as an opportunity, while others appear to be ambivalent.

Among dealers who are familiar with the respective services, here’s how dealers are perceiving ride-hailing, car-sharing, subscriptions and autonomous vehicles, according to Cox Automotive data:

• Ride-hailing
  43 percent: opportunity
  42 percent: neither opportunity nor threat
  10 percent: threat
   
• Car-sharing
  37 percent: opportunity
  45 percent: neither opportunity  nor threat
  16 percent: threat
   
• Subscriptions
  40 percent: opportunity
  36 percent: neither opportunity nor threat
  16 percent: threat
   
• Autonomous vehicles
  40 percent: opportunity
  43 percent: neither opportunity nor threat
  11 percent: threat

Dealership dying? That’s ‘greatly exaggerated’

Nearly three-quarters (72 percent) of dealers shot down the notion that dealerships may one day no longer be needed, but over half (57 percent) think there won’t be as many actual dealership locations needed, according to the Cox survey.

“It’s an exciting if tumultuous time in the auto industry, but there’s plenty of opportunity to reshape and rethink the traditional dealer model for success,” Kelley Blue Book executive analyst Rebecca Lindland said in comments provided by the parent company.

“The consumer’s relationship with the vehicle and their use of mobility is evolving as new options become available, but the death of the automobile — and the auto dealer — is greatly exaggerated.”

In a speech to the Automotive Press Association earlier this month, the chairman of the National Automobile Dealers Association, while emphasizing his fondness for auto reporters, urged them to challenge some of the specific “narratives” around mobility.

“I get it. You can’t go to an automotive or a tech conference these days without hearing about the end of personal vehicle ownership,” NADA chair Wes Lutz said in the remarks provided by NADA and summarized in this news release.

“But I’m asking you: Question the hype, ask for proof, and find out what they’re not telling you. The future will work itself out regardless. I just want us to be informed in the meantime.”

Specifically, Lutz outlined those aforementioned narratives as follows:

• Car ownership will be replaced by ride-hailing.
• The safety of autonomous cars will be considerably higher than those driven by humans.
• Dealers don’t want to sell electric vehicles.

“Each one of these narratives might sound right,” Lutz said in the summarized remarks. “But the truth is that each one is built on false or unproven pretenses. And these narratives are put out there by stakeholders that have an obvious incentive for them to be true — even if they aren’t.”

He specifically points out an August AAA study indicating that swapping personal ownership for ride-hailing as the primary means of transit ended up being at least twice as expensive in 20 of the country’s largest metropolitan areas.

 “I have to tell you, I think this was one of the biggest auto industry stories of 2018,” Lutz said. “Why? Because it disproves one of the central pillars holding up the argument that people are going to stop buying cars, which is that it’s cheaper to use ride-hailing services. But this study shows exactly the opposite of what we are being force fed. It shows that ride-hailing is substantially more expensive than personal ownership, even of a new car.

“And if Uber and Lyft are dramatically more expensive than personal vehicle ownership, then people aren’t going to stop buying cars, and the auto industry isn’t doomed,” Lutz said. “Instead, people are going to continue doing exactly what they’re doing now: Owning a car or truck for day-in and day-out personal transportation, and using ride-hailing services when it makes more sense than driving. That’s not a revolution. That’s an evolution.”

Question safety arguments, Lutz urges

Additionally, Lutz argues against the notion that autonomous vehicles will be safer than vehicles driven by humans — a notion Lutz considers the basis for self-driving cars.

“The conventional wisdom that has taken hold is that humans aren’t good drivers,” Lutz said. “But the reality is that humans are phenomenally good drivers.

“Yes, there were 37,000 fatalities on the roads last year,” Lutz explained. “But Americans drove more than 3.2 trillion miles. That means nearly 90 million are driven in the U.S. for every motor vehicle death. That’s 342 years of driving – 24 hours a day, 7 days a week, 52 weeks a year – between traffic deaths.

“So here are the questions you should be asking automakers, regulators and safety advocates right now: What technologies are coming online in the next five years that will reduce driving fatalities, and that don’t involve removing steering wheels, and brake pedals, and humans?”