Why the Auto Industry should stop selling Cars

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If there is an industry that has even more ups and downs than the car industry, it is trucks and buses. As soon as the economy turns, buying decisions get put on hold, and a sales backlog turns into an inventory nightmare.   But I’ve spent most of my (long) working life in and around […]

If there is an industry that has even more ups and downs than the car industry, it is trucks and buses. As soon as the economy turns, buying decisions get put on hold, and a sales backlog turns into an inventory nightmare.
 
But I’ve spent most of my (long) working life in and around the automotive industry, and one of the wisdoms that age gives you is the ability to see things over longer time-spans than perhaps my younger colleagues in the industry might consider. What seems like an insurmountable crisis (2009) ends up as a mere blip on life’s radar. Company X that you thought would never see recovering from its sales downturns is actually ahead of company Y that seemed impregnable only last year. Never say die, and never get complacent – life is too quixotic for that! 
 
Take the Commercial Vehicle world which has been working hard to turn itself from a products to a services company. Instead of buying 50 expensive buses each year, you can pay  based on time on the road, or kilometres driven. There may still be peaks and troughs, but nothing like before, and you get a far more predictable revenue stream and captive client base.
 
Whilst the B2C car industry might not have quite the same model as the B2B Commercial Vehicle world, I still feel there is significant mileage  in shifting to more of a mobility model. The answer lies in a growing urban population. The younger generation does not see car ownership as an aspirational achievement and has been brought up on consumption-based pricing. Faced with a product that is increasingly “soft” and changing in its nature means that we should be looking to sell services rather than products.
 
“No Sir, you cannot buy this car, but you can buy this service package.” Now there’s a thought.

 
More about our perspectives on the Automotive industry here Automotive Worldwide video

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