New-car and -truck retailers are facing increasing pressure from Wall Street and Silicon Valley-backed disrupters peddling false narratives. This well-orchestrated campaign poses an existential threat to the franchised dealer system of independently owned and operated businesses, which benefits the consumers and local communities these retailers serve.
These false narratives take the form of four common myths:
1. Factory-direct sales are more efficient. Automakers are looking to bypass the franchised dealer network and have asserted — despite persuasive evidence to the contrary — that direct factory sales are more efficient. It's not efficiency they are after. They are looking to establish vertically integrated monopolies, which eventually will eliminate local accountability and harm consumers. Their goal is to eliminate competition and enable big-money interests to divert profits away from Main Street businesses.
2. Buying at a dealership is a hassle, at best, and a hustle, at worst. Disrupters such as Vroom, Carvana and direct-sale automakers have adopted an aggressive go-to-market strategy grounded in outdated stereotypes about the vehicle-buying experience. They are spending tens of millions of dollars on consumer-facing advertising that reinforces negative stereotypes. Wait until you see Vroom's Super Bowl ad. It will make your blood boil.