Pub. 16 2017-2018 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 2 , 2 0 1 7 26 new jersey auto retailer technology overturning the delivery of mobility the same way the media morphed from newsprint to streaming Internet. Car dealers are not department stores easily pushed aside by the In- ternet shopping phenomenon. Why? Because purchasing a new vehicle is the second most expensive transaction most consumers will make (after the purchase of a home). Most new car deals involve a trade and consumers will always want to touch and feel the “product” first, before making a final decision. Just as important, the overwhelming majority of new car trans- actions involve some sort of financing (either a lease or a retail auto loan). While there are a lot of business models that would enable consumers to arrange financing away from the dealership F&I office, dealers will always offer the best, most convenient and most competitive financing to consumers. And service. Oh yea…The disruptors think the car business is all about new car sales. But they are wrong. It’s remarketing; it’s F&I; it’s parts and accessories. And it’s service units in operation. It’s the franchised dealer model that acknowledges that reality and adds value for the consumer. The disruptors and new-age auto retailers don’t get that. But consumers do. For those reasons (and a million others), the new car business is NOT likely to see the same wholesale disruptions as other parts of the retail economy. Whether consumers will always want that shiny metal in their driveway is an issue for another debate. The sharing economy may lead more consumers to alternative forms of mobility. But autonomous vehicles and other new and emerging forms for personal mobility won’t appeal to everyone. Pride of ownership still rules for many consumers and others will always be hesitant to sit inside a fully autonomous vehicle. My conclusion– car dealers who view themselves as personal mobility solution providers, rather than simply new car dealers, will have the capacity to adapt and, thereby, remain insulated from disruptive technologies. Sheldon Sandler is founder and CEO of Bel Air Partners, a fi- nancial services firm tailored to the specific needs of the retail automotive industry. He is a leading authority on the role of fi- nancial markets in automobile distribution, dealership valuations and automobile dealership consolidation. He can be reached at ssandler@belairpartners.com or at 609.252.1125 MY NIGHTMARE  continued from page 23 The sharing economy may lead more consumers to alternative forms of mobility.