CHICAGO — Big shifts are coming to the auto retail world, and dealers say they're getting ready for them.
But don't fall for all the fantastical forecasts you hear, they caution.
Emerging transportation models, with autonomous and electric vehicles, ride-hailing services and subscriptions will indeed help shape the market, and demand attention, they acknowledge. But they won't turn the industry on its head, and they're not killing the personal-ownership model either.
"I'm not afraid of disruption," AutoNation CEO Mike Jackson said at the Automotive News Retail Forum here. "I don't worry about it, but you've got to think about it. You've got to have a plan. You've got to realize how you're going to take your company and position it to thrive in this dynamically changing environment."
Claims that people will no longer buy personal vehicles, that autonomous vehicles will eliminate traffic fatalities and that dealers have to be dragged into the electric vehicle revolution might "sound right," Wes Lutz, president of Extreme Chrysler-Dodge-Jeep-Ram in Jackson, Mich., said in Detroit last week. "But the truth is that each one is built on false or unproven pretense. And these narratives are put out there by stakeholders that have an obvious incentive for them to be true — even if they aren't."
Jackson points, for example, to the development of autonomous vehicles as an area where expectations need to be tempered.
Autonomous vehicles that leave the driver responsible — Levels 1, 2 and 3 — are coming. But drivers must "trust the system but be prepared to intervene on a moment's notice," Jackson said.
Transitioning to autonomous vehicles that don't need a driver's supervision — Levels 4 and 5 — "is exponentially [more] complex and expensive," Jackson said. "The step up to Level 4 is the difference between putting a man on Mars and a man on the moon. We've put a man on the moon, but we haven't gotten anybody on Mars yet."
The cost of a Level 4 system could be between $100,000 and $200,000 per unit, he said. "No consumer is ever going to pay that kind of money for personal use of a Level 4 or Level 5 system."
Electric autonomous vehicles are a good fit for the sharing economy, he said. AutoNation has invested in that slice of the market by partnering with Waymo to service its autonomous fleet in Phoenix.
"We have several hundred of them on the road already and sometime this year those vehicles will be operating without a supervisor from Waymo," Jackson said. "We'll be part of that and we hope to grow with Waymo."