Volvo is making a bold move by starting to sell cars directly on the Internet.
The Chinese-owned Swedish car manufacturer is going to slowly increase its web offerings. The goal is to sooner or later be able to offer every model available for purchase online. Volvo makes this announcement on the heals of AutoNation who announced that they too are making the move to online sales. GM and Toyota have also started pilot programs of their own to test the online sales water. And don’t forget the electric carmaker Tesla who has been the model for online buying of cars in the most non-traditional way.
Questions arise immediately. The first, is how will this affect the traditional dealership model?
Volvo claims that this shift to online retailing will not come at the expense of its existing dealerships, rather Volvo is calling it a “compliment.”
Asking Yahoo Finance Editor in Chief Aaron Task his thoughts, Task believes it’s a logical move.
“That’s how millennials want to shop, and it’s the kind of thing you should be able to buy online. This is about Volvo trying to differentiate itself,” Task goes on to say. “It’s still relatively small compared to other automakers and they need to do something different. Also, this is what consumers want.”
The main reason for the shift? Volvo it seems is following the advice of Grant Cardone, who says in his New York Times best selling book, If You’re Not First You’re Last, to do what your competition wont. If Volvo, which is still a relatively small company can find ways to compete with larger OEMs with more financial resources, this could be the competitive advantage they are looking for. Additionally, Volvo is passing on typical major auto shows attendance in an effort to save costs.
All this in mind, the big question still remains. Are we seeing the beginning of the end for the typical dealer business model? Many, Task included, will cite the power of the dealership model and how much of a fight Tesla has had on it’s hands as it tries to survive. Dealer groups and franchises employee millions and are a major contributor to the health of the national economy.
It is also important to point out that buying a car online isn’t as simple as ordering a book on Amazon or a movie on Netflix. One doesn’t finance a book, there’s no trade in to deal with on Netflix. Buying a car can be a complicated transaction so it’s hard to see the move to online. With that in mind, in 1995, it may also have been hard to see buying shoes without trying them on first or NOT having a storefront to buy music in, but with a little creativity and entrepreneurship, the way many if not most Americans buy shoes and music is completely different now.
Only time will tell how this move will affect the dealer model but ultimately if you look at other brick and mortar businesses that has been decimated by the internet, it isn’t that far of a stretch to say that without any real human value and better shopping experience for the consumer, the move online might just happen sooner than you think.