Community

Share your automotive expertise

2 Write a Blog Post

Filed in: New Car, Used Car

Is ZipCar's Acquisition A Sign of the Times for Car Dealerships?

By Eric Miltsch on Jan 3, 2013

 

ZipCar Does the Avis rental car acquisition of ZipZar indicate the start of a potential trend for automotive retailers and how they connect with the next generation? ZipCar is being acquired by Avis for nearly $500 million. But why? What's the play here? 
 
Initial reports indicate Avis will let ZipCar continue operations as a subsidiary. But, with ZipCar only in the US, Canada, the UK, Austria and Spain and a stock dropping faster than the temperature in the northeast, what does Avis really see between the lines here? 
  • Is Avis simply looking for customer acquisition growth from the current ZipCar user base of 750,000+ users worldwide? 
  • Are they looking to convert these users into eventual renters down the road? 
  • Will Avis ramp up ZipCar's fleet from their own inventory?
  • Are they looking to try and sell their vehicles directly to them? 
 
Regardless of their intentions, there are a couple of issues automotive retailers should be aware of:
 
  • More alternatives for younger drivers to access vehicles by keeping them loyal to the Avis brand
  • The concept of ownership is a major factor with younger consumer - ZipCar and Avis could make the process of gaining access to vehicles much easier
Is this a signal for greater ripples within the retail automotive segment? If anything, this should be a sign for automotive marketers to start selling their overall experience, pain-free shopping and ease of ownership to this portion of the car buying population.
 
What do you think, is this the start of a new trend or is this a non-event?

Comments

It's definitely a new trend. I've read tons of data that proves that a growing number of millennials are more interested in an iPad vs. a new car. Car ownership is being viewed as just too costly, and it's not as "cool" as it used to be (especially when other alternatives exist). However, I wouldn't worry too much. The real threat is the self-driving car - after these cars become mainstream, the demand for cars will fall rapidly.

Jan 3, 2013

I feel it is a way for them to reach a customer that they never would get otherwise. My step daughter lived in Manhattan for 5 years, did not own a car, but used ZipCar whenever the need arose. ZipCar's use of technology via mobile was appealing to her. No need to go to the airport or rental location, just tell them where you are at and they direct you the nearest car. The entire transaction was handled via her iPhone. So, it ma be a new trend for older companies who are learning that they have to reach younger consumers for their products in a completely different way.

Jan 3, 2013

Jeremy - I'm fascinated by the concept of ownership today. I remember as a kid wanting to buy a video, a tape or even a record. It was a day long process of organizing a ride to the mall via my parents or a friend's parent; the act of going into a store, buying the item, taking it home - and then "owning" this physical object...it then sat on my shelf, proudly displayed. it's completely different today.

When my son wants to buy music, he clicks a link. Done. When he wants a new game, click - done. Nothing is displayed, other than the hardware that houses all this "stuff" they "own" virtually.

Interesting that you mention the self-driving cars as well. I've read where Larry Page's early vision of these vehicles wasn't necessary to position them as vehicles of convenience for drivers, but rather as the wheelchair of the future. Maybe the next generation will simply prefer convenience and accessibility over ownership & the self-driving vehicles are the ultimate solution - who knows, maybe they'll become self-driving ZipCars:)

Jan 3, 2013

Jeremy - I'm curious how you arrive at your position that the demand for cars will "fall rapidly" when the self driving (aka autonomous) car will enter the mainstream. The other side of your position would suggest that it would be boom for dealers as a radical new transportation option. Further, the feature set of the autonomous car - aka what can I do while I'm not driving - will be the battle ground and keep competition fierce.

I'm not seeing how the demand for individual transportation will fall. Compared to non-autonomous cars, sure the traditional car would be at risk but that's no different than the introduction of any other major advancement. Am I missing something?

As for the original topic - I tend to think that dealers should look at this as another customer segment that might not have been available and work to develop a longer term relationship. The dealer that can position themselves as the solution to individual transportation across a range of consumer segments is going to have a leg up. The lifetime value of the customer is the key.

Jan 4, 2013

I believe it is just one more way to reach a clientele that is slipping through their fingers and living in areas where vehicles are required. Rather than allowing public transportation to get the public's money, they've decided to pay attention to this growing populace. It is a smart acquisition, only because it was a good concept to begin with.

Jan 8, 2013

Comments 1 - 5 of 5

You must be logged in to comment

Login Create an account

Add your comments:

   

Eric Miltsch's Recent Posts

Related Posts

  • 5 Reasons Our New Vehicle Merchandising SUCKS Online!

    Is it just me or are we missing the boat on how we present our vehicles online? Especially in the new vehicle inventory department. Check out this quick and dirty review on why we SUCK at marketing our new vehicles online!Read post

  • Common Sense about Inventory Management

    Inventory management systems should be about helping you maximize profit and minimize risk, car by car and store by store. That’s it. But the problem is that a goal like that can seem confusing. There are so many trendy, overly complex methods being promoted and sold, so many “better and new ways,” that it’s hard to know what’s right. For managers looking to change inventory management software , it turns a relatively straightforward choice into a scary proposition. What’s more, today’s systems have grown to the point where they do almost everything, from pricing to transportation. Heck, there might even be a service out there that does your laundry. Choose the wrong software and you may lose tens of thousands of dollars and the shirt right off your back! The truth of the matter is that it’s not that complicated. Amidst all the talk, the basics remain:  Understand how a vehicle might perform at your dealership. Optimize your price to the market. Perfect your mer...Read post

  • Do you want a sales process?

    I have been aske numerous times for a a sales process; here it goes: The Initial Greeting:   You only have one opportunity to make a positive first impression with a customer! Before you ever meet the guest you need to be prepared! Part of the Team sales process involves the use of several tools to help create that positive first impression: Sold/Hold Card Business Card Pen Smile We NEVER go on the sales floor without our tools! As you take a shift in the UP (unplanned prospect) rotation you should avoid any distractions like cell phones, phone calls, conversations with other salespeople and anything else that might take your focus off of the lot and the customer parking area.   When a guest arrives you give them a moment to exit their vehicle before you go out to meet them. It is called a Meet & Greet because you MEET the guest where they are as opposed to waiting for them to come in to see us. We use the following greeting:   “Good morning/afternoon/evening! Wel...Read post

  • The 1.3 Dealer Myth Destroyed

    Just about everyone in the business has repeatedly heard and read that the average shopper visits only 1.3 dealerships before buying a vehicle. It’s been repeated in countless articles and at nearly every automotive marketing conference. That statistic is false, it was always false, and it remains false. New research released by J.D. Power and Associates again debunks this myth. J.D. Power also put out information in 2011 which contradicted this myth, but few wanted to hear it. Here is the link to the entire story and a complete understanding of what the actual data means, http://www.dealereprocess.com/1-point-3-dealer-myth-destroyed/ Having the facts right does not diminish the importance of the internet. Just getting shoppers to the store is still not enough. Great websites meet the information needs of shoppers, bring them to the store more ready to buy, and provide full content on mobile devices to meet shopper needs within the store. In the modern buying cycle, websites neve...Read post

  • Use Your Talent & Develop Your Skill

    Use Your Talent & Develop Your SkillRead post

  • How CPS can help justify your traffic from sites like Autotrader and Cars.com

    CPS stands for Cars Per Shopper and its a number that we have been tracking weekly looking at the amount of shoppers on Autotrader divided by the amount of total..Read post

  • Manufacturers’ Lists To Connect With Your Next Sale

    Using the information from a manufacturer’s list, a good automated marketing solution can create personalized campaigns for individual customers. You control what you want the solution to look for. Want to run targeted ads based on vehicle purchase date? Last maintenance appointment? Vehicle model? It is possible to create campaigns based on almost anything, and the marketing automation solution sorts out which messages would be most relevant to which customers.Read post

  • GM: Why Customers Are Loyal Despite Recalls

    A recent article on the Huffington Post asked why consumers are still buying GM vehicles despite all of the recent recalls. There’s no question that there are many concerned owners of GM vehicles. According to the article, GM has “issued 44 recalls in North American this year, stemming from problems that have been tied to 50 crashes and 13 dealers, [yet] the company recently said its sales for the month of May were up 13 percent from the month before, the biggest May gain in seven years.” Common sense might lead a person to believe that consumers would become more hesitant to purchase a GM vehicle with all of the problems that are occurring. But the numbers indicate quite the opposite. Loyalty doesn’t always follow reason. As the article indicates, there are many points that make consumers remain loyal in times of turmoil. One reason the article cites is ignorance of the recalls themselves. “Experts say about one-third of people with a vehicle affected by automaker recalls...Read post