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 7 new jersey auto retailer W W W . N J C A R . O R G President’s MESSAGE | BY JAMES B. APPLETON PRESIDENT’S MESSAGE  continued on page 10 The “Mobility Economy” And Its Impact On The Traditional Automotive Retail Model If dealers are not looking at the long-term picture and working to ensure they are adapting to changing conditions, they risk becoming a less important part of the personal mobility future. Legal, regulatory, manufacturer, recall and many other issues demand a dealer’s attention every day. But it would be a mistake to ignore potential long-term developments that will impact the future of your business and the entire franchise automotive retail industry. This column will touch on just a few of the potential issues that will be critical to the industry’s future. First, dealers should look at the impact of WHERE people are living. A century ago, only 30% of the U.S. population lived in just a few urban centers that were not particularly connected in any meaningful way. In 2017, it’s estimated that more than 80% of all Americans live in and around urban areas. This mass exodus from rural locations to the nation’s cities will have a profound long-term impact on personal mobility (and vehicle sales). The second trend that dealers should watch is the many factors that go into how consumers make their transportation choices. Gov- ernment mandates around clean cars will demand an exponential increase in sales of alternative fuel vehicles (clean diesel, ultra-high efficiency gas engines, gas-electric hybrids, pure electrics and hydrogen fuel cells) over the next few years. There are scenarios where manufacturers could circumvent the franchised dealer network or consumers choose to bypass vehicle ownership altogether. Tesla has already been granted approval to open a handful of mall-stores where they sell vehicles directly to consumers. Other manufacturers will watch how the Tesla experiment plays out and may look for ways to bypass franchised dealers if the business model proves successful. Some consumers are also choosing to reduce their carbon footprint by making greater use of mass transit, ride-sharing, or car-sharing options. Most automakers are already testing car-sharing and/ or ride-sharing programs. Manufacturers may look to meet their clean car mandates in New Jersey and the other CalLEV states by placing thousands of electric units in operation as ride-sharing vehicles available directly from the manufacturer’s own personal mobility subsidiary or through an existing, in-State partner. Park and rides, municipal parking lots, shopping malls and commer- cial office complexes could eventually be full of electric vehicle charging stations and electric vehicles ready to take subscribers from one location to another. What Could This Mean For Dealers? If dealers are not looking at the long-term picture and working to ensure they are adapting to changing conditions, they risk becoming a less important part of the personal mobility future.