Why Dealerships Are Still Crucial for Car Sales, According to Fiat and Honda
In an era where online shopping has become the norm, many industries have shifted their focus to digital-led direct-to-customer sales. However, Italian brand Fiat and Japanese brand Honda are bucking this trend by emphasizing the importance of their dealer network in the car buying process. Both brands believe that dealerships play a crucial role in representing their brand and providing a personalized experience for customers.
Fiat Europe boss Gaetano Thorel firmly believes that “our dealers are our engine.” He recognizes that dealerships are not just a place to buy cars but also serve as the face of the brand in the market. Thorel highlights the importance of physical showrooms, stating that customers who are purchasing a car in the €30,000-€40,000 range want to touch and feel the vehicle before making a decision. He believes that showrooms provide the perfect environment for customers to interact with the cars and make an informed choice.
Similarly, Honda UK product boss Andrew Winfield emphasizes the loyalty of their customers and the value of the dealer experience. Many Honda customers have bought multiple cars from the same dealer over the years and have developed a personal relationship with them. Winfield states that customers are comfortable talking to their dealer because they know them by name. This personal touch and familiarity create a sense of trust and confidence in the brand.
While Fiat and Honda are committed to maintaining their dealer network, other car manufacturers like Volvo, Tesla, and Mercedes-Benz are embracing the online world. These brands have adopted an agency-style model, encouraging customers to buy directly from their websites. This approach offers a centralized sales process and a common pricing structure, eliminating haggling and giving car makers more control over the buying process.
Mercedes-Benz UK CEO Gary Savage explains that this shift allows them to focus on “more profit from fewer sales.” The brand is no longer solely focused on chasing volumes but aims to increase the value of each sale. However, Fiat CEO Olivier François believes that dealerships still hold significant value, especially in Italy, where they have more dealerships than churches. He plans to leverage the existing dealership network to increase sales rather than pushing customers towards online buying platforms.
Luxury brand Lamborghini also recognizes the importance of dealerships as ambassadors of the brand. Lamborghini CEO Stephan Winkelmann emphasizes the need to entertain customers and make them feel part of an exclusive club. He believes that dealerships play a crucial role in creating a unique and memorable experience for buyers, setting luxury brands apart from their competitors.
Despite their commitment to dealerships, Fiat and Honda acknowledge the growing demand for online buying options. Honda is trialing online-only sales for its first electric crossover, the e:Ny1, to cater to customers who prefer buying cars online. However, Winfield emphasizes that even with a fully online experience, customers still value the reassurance of being able to talk to someone in person. The ability to touch and feel the car before making a purchase is essential, especially for higher-priced vehicles.
Fiat is also exploring online sales options with its Citroën Ami-based Topolino. CEO Olivier François sees this as an opportunity to learn and understand customer preferences. He questions whether customers would choose to buy a car from the comfort of their homes or visit a showroom when given the choice.
In conclusion, while many car manufacturers are shifting towards online sales, Fiat and Honda believe that dealerships are still crucial for their brands. They recognize the value of physical showrooms in providing a personalized experience and building trust with customers. However, they also acknowledge the need to adapt to changing customer preferences and are exploring online sales options to cater to a wider range of customers. Ultimately, the key lies in finding a balance between the convenience of online buying and the personal touch of a dealership.