Future of Car Sales and Marketing

Car manufactures are investing a lot money in research and development of these new car models. They are adding newer features day-by day and are trying to integrate the car into the ecosystem of the customers. But somewhere in these developments the car manufacturers have not upgraded their sales and distribution system. The car dealerships are same till now as they were fifty years ago apart for some technical updates. This prevents the cars sellers to demonstrate their cars in the best way possible. The very common practice of demonstrating a car is to allow the car to be driven around for a couple of kilometers by the customers. But this does not give the customers a 360-degree judgement of the performance of the car. It might be possible that the terrain where the customer will drive the car might not be the same as the nearby roads. The car might perform better in the nearby road conditions which are flat and might give way when taken for a long drive for more than 500 kilometers at a stretch or when taken to muddy or rocky terrain.
The car dealers also keep a lot of cars as a standby inventory which results a lot of monetary investments. Piling up of inventory might lead to the damage of the car and distress selling of the same when the inventory exceeds the capacity of the storage. This also might lead to the loss in profit of the car companies. The location of the car dealerships is also a hinderance for the customers and many a times, it is located outside the city. So, the customers who are willing to buy the car must spend the entire day to go to the car showroom, do test drives of the various models of the car and then take the decision. If the customer wants to compare with the cars of different manufacturers, then he must spend multiple days to go to different showrooms, test drive various cars, compare them based on the fuel efficiency, build quality, comfort, fuel efficiency and other parameters and then take the decision of buying the car. Many-a-times, this becomes a huge uphill task as the customer gets confused of so many choices available and postpone the decision of buying the car. This confusion also might lead to the customer to be misguided and if it happens, he will lose faith on the car company. And once this happens, it is not good for the car companies as they will lose a potential customer and recurring customers because many a times the customers upgrade to the higher model car of the same car manufacturer.
So, to summarize, the problem that are faced by the existing and potential car customers are:
1. Car manufacturers have not upgraded their sales and distribution system and the terrain where the customer will drive the car might not be the same as the nearby roads.
2. Keeping a lot of cars as a standby inventory which results a lot of monetary investments.
3. Distress selling of the same when the inventory exceeds the capacity of the storage which also might lead to the loss in profit of the car companies.
4. The location of the car dealerships is also a hinderance for the customers and many a times, it is located outside the city.
5. The customer wants to compare with the cars of different manufacturers and often they have to go to different car showroom on different days to test drive different cars.
Solution
For the cars to graduate from category 2 to category 1 they need to a become an impulse buy which would then become an indispensable lifestyle product because research shows that customers do more impulse shop when it is directly linked to their way of living. Also, the location of these showrooms should be changed. Currently, they are located in the downtown area and customers as discussed earlier plan before hand in order to reach the showrooms and in order to solve the problem, the car showroom or dealerships should be located within the city premises or more precisely in shopping malls or convention centers where there is always a congregation of people from different age groups and from different income groups of the society. The showrooms should be located just beside clothing or shoe stores where customers go regularly to buy the goods as per their lifestyle. Also, the car dealership should shed their professional environment to become more inviting and friendly to the customers and should be called showroom instead of dealerships.
But the location of car showroom in the location within the city will increase the monthly rentals substantially. So, the carpet area of the showrooms should be decreases in to have low rentals. To achieve this the desired results business model of the selling the car should be changed. Currently, the showrooms have a huge inventory of cars, of both latest and old models. When a customer goes and enquires about a car, the owner of the showroom allows for the test drive of a car up to a certain distance. There is a huge flaw in this rule.
For test driving the customer drives it on the road located around the showroom, which does not give the full picture of the car`s performance to the customer. It does not let the customer know how the car will perform in sandy, rocky or marshy terrain. So, if he takes the car in one of these terrains, he might not get the desired performance out of his car. So, to eliminate this problem, there should be a experience center within the showroom with a simulation system which will use AI to give the customer real feel experience of the car when it is driven through different terrains. This will also show a difference in the performance of the car when driven for longer period like 2-5 years and show how regular servicing of the car will enhance its performance. There should be various options for interval of servicing for the customers to experience and select the optimum servicing period for the car, thus optimizing the monthly installments and most effective interval of servicing. And once the customer selects a car and makes the initial payment, the car will be delivered to his doorstep from the company warehouse. This simulation will also give the customer an option for customizing the car as per his or her needs.
As the car companies have multiple models, the interiors of the simulation mechanism can be changed to replicate different models. If this model of selling the car is achieved, a lot of customer grievances will be resolved and there will a lot of transparency in car business and the gap between the technologies used inside the car and the way of selling the car will be filled. Also, the companies won’t need to employ as many technicians as the present situation and in a way the company will save in the fixed cost of the showroom.