BMW says the classic car sales model is a thing of the past

Ian Robertson is head of sales for BMW. He says, “Our business model will change more in the next five to seven years than it has in the last 100 years.” What changes does he foresee?

First and foremost, he thinks digital technology has fundamentally changed the way people buy cars. “The world was simple 10 years ago. Then, potential customers stopped by the dealership up to four times to gather information and then finally buy the vehicle they wanted. Today 97% of all BMW customers orient themselves on the Internet and visit the dealership and an average of just 1.3 times before their purchase.”

He adds, “Car buyers have never been better informed than they are today. They intensively incorporate information on our websites and in online media and social networks into their decision-making. The classic car sales process is a thing of past.”

The changes mean that the role of the traditional sales consultant will change. In the future, sales people will be consultants who collaborate with customers to help them select the right model with the right options for their needs.

Since the sales process will require more time, the after-sale component will need to be shorter. As a result, “financing, registration, delivery can all be highly standardized and automated, and take place in less than an hour.” Shortening the financing portion of the process will happen with better digital system and reducing the number of people involved in the approval process.

Robertson then offered some insight into how the relationship between customers and dealer service departments will change. Many things that require a service appointment today will be eliminated entirely, he thinks. “[M}any customers would prefer not to be involved from now on. Like an app that is updated automatically, cars should always be kept up-to-date technically. Software updates over the air are just the start of a new generation of remote services.” At present, only Tesla Motors has that capability.

Finally, Robertson offered some reflections on how the car ownership model is changing. “The significance of the automobile as a product is different from what it once was. The trend runs from owning to short-term leasing to temporary use when necessary.

“Mobility is being redefined. There is a reason that our car-sharing service DriveNow now has more than 500,000 active users in nine European cities, such as Munich, Berlin, Copenhagen and London, among others. They spend an average of 25 minutes per day in our vehicles.

“I would venture to predict that the majority of them will no longer own their own car in the future. Why is that? They are starting to enjoy premium mobility, which they really might not have been able to enjoy previously. And it is convenient: no insurance, no visits to the service shop, no lines for fill-ups.

“Our brand claim, innovative vehicle technology, and workmanship are naturally still the focus at BMW. Nonetheless, the way that people use our products is going to change.” There seems to be little doubt about that.