Digitizing car buying in the US.

Dana Leever, Account Director
14 February 2020

Evolution of the US Automotive industry

The US Automotive market has gone relatively unchanged over the past 100 years, still functioning on an outdated business model that requires automotive manufacturers to sell through independently owned and operated physical dealerships. Dealerships have evolved into a multi-modal sales channel, comprised of new car sales, used car sales, parts, accessories, service, finance, and insurance. This evolution has made the automotive industry one of the most lucrative in the business world. But is it now time for the industry to re-imagine itself and embrace the fourth industrial revolution?

We see the advancement, adoption and integration of technology across every facet of our lives, with exponential impact to the consumer landscape. However, dealerships are feeling the heat and are facing many challenges to try to keep up and stay relevant. From personalized digital shopping, mobile service appointment scheduling, and mobile finance calculators, the US car market has entered an era of disruption—a disruption that will change the entire automotive-retail business.

In this blog, we’ll discuss three challenges car manufacturers and their dealerships are facing when trying to keep up with consumer expectations and today’s evolving digital landscape.


No matter the market, consumers are seeking personalized shopping experiences. The key to personalization is data.

Throughout the consumer’s path to purchasing a car, there are countless touchpoints at which there is an opportunity to collect and share data. Data clings to a consumer through site cookies, Google searches, virtual assistants, model configurators and so on. Some data lives with the shopper and some data lives with the car manufacturer and dealers.

The challenge? Linking all the data points together to make a seamless and personalized shopping experience both for the shopper and the dealer. Creating this personalized shopping environment will help transform this industry from a transaction-based relationship to one based on becoming a trusted advisor to the customer. Linking the digital online and offline shopping experience does a multitude of things, but most importantly saves time and stress for the shopper and dealer. Shoppers seek transparency during the process and want a pain-free interaction.

Car manufacturers and dealers will need to bridge the gaps in the flow of data in order to fully create a personalized car shopping/buying experience. The dealership needs to provide all available customer data at the fingertips of their salespeople, including previous transactions and service histories, sociodemographic information, etc., in order to facilitate a highly customized sales experience. It also means using a combination of dealer and third-party data to proactively connect with customers with the right marketing offer at the right time.

Since the industry is a maze of Dealer Management Systems, content management systems and software vendors, most of which are mandated by the manufacturers, dealerships are struggling to navigate the chaos. The complexity and lack of integration across systems limit the dealer’s ability to personalize and digitize their sales process.

Connecting the data sources will allow dealers the opportunity to create an enjoyable and seamless digitized experience along the entire purchase process and ownership experience to create trust and link shoppers to the dealership.

Evolving Sales Models

Disruptor brands such as Tesla and Rivian, have taken the traditional car sales model bypassing the dealership middlemen and introducing a direct-to-consumer model. These brands have had to carefully navigate state franchise laws that require that new cars be sold only by independent dealers. Tesla contends that in order to properly explain to their customers the advantages their cars have over traditional vehicles with an internal combustion engine, they cannot rely on third-party dealerships to handle their sales.

Manufacturers and dealerships have also adjusted what they’re “selling”. They’re not just selling the car, but also services. Services such as the obvious oil changes and tire rotations, but also technology packs and other monthly options that consumers can opt into/out of. 

Although these brands are still relatively small players in the market, traditional manufacturers (and their dealerships) will be at a considerable competitive disadvantage and must adopt drastically different business models and pursue new revenue streams in order to compete with the disruptor brands and meet expectations of customers.

Dealers can no longer just post their inventory online and wait for customers. Alternatively, both manufacturers and dealers will need to build the infrastructure required to engage customers both online and offline via an omnichannel approach. E-commerce solutions need to be in place to enable customers to research online before coming into the dealership.


There is a growing trend against individual car ownership, with Zipcar, Turoa and Maven at the forefront of taking advantage of this mobility movement. Other transit brands are filling the need for people only who want to be “mobile” for short periods of time vs. needing a permanent mode of transportation. These brands are increasing convenience, decreasing costs, and providing more sustainable personal mobility options to consumers.

Mobility on demand, Uber/Lyft, bike/scooter sharing, has yet to have any real impact on the demand for private vehicles, however, the pending arrival of autonomous vehicles and greater cooperation with public transportation groups and private industry is sure to impact new vehicle demand in the near future.

Some manufacturers are getting their toes wet testing “car subscription services” such as Audi Select, Care by Volvo and Porsche Passport, whereby you can get a new car for a flat monthly fee, which includes insurance, maintenance and service.

Dealers that can address and tap into the mobility movement, will gain traction and affinity with the growing group of consumers leaning away from owning a vehicle.


Many of the automotive industry’s challenges and opportunities can be positively addressed with the innovative use of technology and by building cohesive applications that tie together the consumer, the manufacturer and dealerships, resulting in a streamlined and positive sales experience.