I’m guessing there’s a strip not too far from where you live that is covered in dealerships. The next time you drive by, as a passenger and not a driver, take a few moments to study the size of these stores. In fact, there might even be one or two of them in the middle of some massive renovations. Now, try and guess what a new dealership like these actually cost.
I was invited a few years ago to a Mercedes store opening near my home. I threw on a suit jacket and headed on over, curious to experience what a state-of-the-art high-end new car dealership looked like on the inside. In a word, the place was stunning. The work on the building required 18 months to complete and cost a whopping $25 million! As incredible as the place is, I’m convinced this dealership model is doomed.
The future belongs to boutique shops as established by Porsche, Genesis and Cadillac. The overhead required to maintain, update and renovate such huge properties like the Mercedes dealership is clearly excessive. In a bid to cut costs in the future, leasing floor space in shopping centers or strip malls will become the norm. For the price of one dealership, a brand like Mercedes will be able to open up dozens of stores staffed with a few product experts.
If you’re thinking my logic bears a huge hole in it, here’s what’s missing.
As you can see, this business model begins with luxury brands. On servicing appointment day, someone will come and get your car (or it’ll drive itself to the shop) and either leave you another car or give you a day- or week-long pass for a car sharing program. Your car’s servicing will be done at a multi-brand mega center, equipped with absolutely everything including highly-trained technicians.
These guys and gals will, however, not be assigned to a single specific brand. Ever notice how VW, Audi and Porsche share components? That the Mercedes GLA and Infiniti QX30 are the same vehicle? What about the next BMW Z4 and Toyota Supra? This is but the beginning of true global automotive products.
It’s clear then that a single technician, with the proper knowledge and tools, will be able to work on a number of brands. The shop, or garage, will be centrally located and receive cars from all over, be they Maserati, Lincoln or any of the others I’ve mentioned. The costs for building and developing these mega-centers will be shared by the existing giant automotive groups and OEMs alike.
In time, this scenario will trickle down to Chevy, Ford, Dodge, Hyundai and all the others. I expect that all of this will come to pass in the next 30 years. In the meantime, I will be lobbying for waiting areas or lounges with free coffee and TVs at these mega-garages. By the time they become common, I’ll likely be retired and will need a place to hang out and read my holographic newspaper.