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Last week Automotive News reported TrueCar Inc.’s purchase of Automotive Lease Guide from DealerTrack Holdings Inc., with plans to incorporate ALG’s residual values into TrueCar’s price information. Dealerships will sell about 250,000 new cars and trucks on TrueCar.com this year, but they are required to post no-haggle vehicle prices with their listings. In return TrueCar sells leads to dealerships for about $300, which result in a sale 25-35% of the time. Scott Painter, CEO of TrueCar Inc. says “by the time the consumers get to the dealership, no selling is required.” All that’s required is to sign the paperwork, pick up the keys and go, basically eliminating the need for salespeople.
DealerTrack retains 15 percent stake in TrueCar Inc., and of the deal DealerTrack CEO Mark O’Neil said, “We are making an investment in a high-growth progressive company that is positively impacting the ways cars are retailed.” DealerTrack must view the automotive retail world in much the same way as Mr. Painter… in the future sales managers and salespeople will be superfluous.
Do you feel this is a positive trend? Personally, I disagree with this future vision of car retailing. No doubt a small percentage of consumers will pay for a car unseen, but this being the 2nd largest purchase a person will make in their lifetime I believe that most people will want to look the person in the eye from whom they are buying the vehicle. I agree with Mr. Painter on the point that the days of the high pressure salesperson are over. But this is not new news. This has been happening over the last 5 -7 years. Currently the role of the salesperson has changed to more of a customer relations manager. Even if it does get to a point where the vehicle becomes a commodity the Sales Manager and salesperson will still be needed to differentiate their dealership from other dealerships of the same brand. And we are not even talking about when the customer wants to trade their current vehicle in on the new vehicle. Financing and lease options? Sales Manager and F&I manager will still be need to handle these. People these days want convenience and having to search for the best deal on the car, sell my trade by myself, search for the best deal on financing and leasing and then pick up the car at some dealership is not in any way convenient.
The fact is, salespeople, sales managers and F&I managers will always be needed to create differentiation and value in the purchasing process. What do you think? Do you think in the future dealerships will be nothing but depots where consumers pick up their vehicles, with no salespeople to be seen?