Local auto dealership Jim Hudson Lexus announced a multimillion dollar expansion of its property on Washington Road last year; however, this expansion is bucking the national trend where more and more dealerships are downsizing or fading away altogether.
What used to be called the “motor mile” on Gordon Highway now only boasts a collection of empty lots.
There are actually a multitude of reasons that new car dealers are having to evolve with the times or face extinction.
According to the Business Insider, despite having one of the largest lobbying organizations, the National Auto Dealers Association (NADA), start ups such as Tesla are changing the way cars are purchased.
Tesla does not have any franchised dealerships.
It is illegal in most states for auto manufacturers to sell directly to customers, but Tesla has found a crafty way around the laws, in many cases, by arguing that they do not sell a “traditional” automobile. Tesla’s logic is that the product is merely a souped-up street legal golf cart.
The franchise laws were sold to the public as a way to keep auto manufacturers from opening competing dealerships across the street from a franchisee. Lobbyists of NADA argued that franchise laws would boost local small businesses and create jobs.
The funny thing is that the Big Three (General Motors, Ford and Chrysler) were all for the franchise laws as well. The laws helped virtually eliminate small brands such as Kaiser-Frazer, Hudson and Packard that could not build the vast dealership networks to sell their cars.
Also, over time, people’s buying habits have changed.
In earlier times, thanks to “planned obsolescence,” people would trade in their cars every three years. The main reason “halo” cars such as the Corvette and Thunderbird came about was to attract potential buyers in to look at a car that was cool but impractical or out of the standard drivers’ price range, and the salesmen were more than happy to guide the buyer to a more practical vehicle.
This was back in the days when cars started rusting almost the moment they were driven off the lot. Keeping a car past 50,000 miles was unthinkable.
Thanks to technical advancements, people are keeping their vehicles longer.
The technical advances have also cut sharply into the bread and butter of the traditional dealerships: the service department. Cars need far less maintenance than in the past and electric vehicles need almost no maintenance at all.
Technology now exists for over-the-air (OTA) updates to vehicles. The NADA is pushing for legislation to prevent manufacturers from offering OTA, and currently Oklahoma and West Virginia are considering the legislation, according to Car Edge.
However, Tesla already offers the service, which, via Wi-Fi, can address recall issues or offer upgrades without the car ever leaving the owner’s driveway.
Prior to COVID-19, people were already using the internet to search for a new ride, and the pandemic put that convenient method into overdrive.
Rather than rely on Consumer Reports and spend days wandering around car lots with a salesman hyping the models and haggling over price, a buyer can select the car they want, view the CarFax report, kick the tires virtually and simply show up to the dealership to sign the paperwork.
The Business Insider notes that some dealerships are trying gimmicks such as offering dog parks and catering to lure in customers, but the days of crowds swarming car lots to munch on hot dogs and see the latest Corvette being unveiled are long over.
Scott Hudson is the Senior Investigative Reporter and Editorial Page Editor for The Augusta Press. Reach him at scott@theaugustapress.com
