Dealerships and dealer groups are worried about the future. They should be.
There's a shift in the automotive industry away from the traditional sales model toward a subscription model. Car ownership could be like your Netflix or iPhone plan. The man in charge at Michigan-based startup Rivian said those dealer and dealer group concerns aren't necessary.
RJ Scaringe, Rivian founder and CEO, told Motor Authority at the 2018 LA Auto Show on Thursday that despite the startup's direct sales model it sees an opportunity to leverage dealerships in the future to own service.
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"The existing dealers are all recognizing that there are changes happening to their business," Scaringe said. Consumers have more knowledge than in the past thanks to the Internet, they understand the buying process, which shifted the traditional sales model of haggling on prices.
Add in traditional automakers that are trying subscription models while maintaining a dealer network, and dealerships may seem to be on their way out.
"There are aspects of what the dealers do that don't get talked about enough, which is an extreme part of the value-add process," said Scaringe.
Service and support. That's what Scaringe said dealerships should own.
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Rivian's received a lot of interest from dealerships and groups interested in owning the service and support part of the automaker's future, and Scaringe said that's the route the automaker will take.
Consumers will subscribe to or buy/lease from Rivian direct, but then a network of partners will be the support system.
Who, what, where is all still in the works, but Scaringe said those plans will be laid out in the very near future.
