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Tom Tucker
Tom Tucker

The Future Of Car Buying

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The changes sweeping the industry may also transform the century-old car dealership model, with some envisioning dealers as primarily service centers rather than car depots, and even as potential electric-vehicle charging stations of the future.

Dealerships are, of course, not going away, not in the least because car-buying runs into intricate franchise laws that vary from state to state and, for the most part, either bar direct sales altogether or limit them.

The number of people buying cars online has grown steadily as the likes of Carvana Co. CVNA, +10.87% and Vroom Inc. VRM, -0.14% can attest. Carvana, which sells used cars online and became public in 2017, logged its first quarterly profit and reported sales well above Wall Street expectations last week. The company said it sold 107,815 vehicles to retail customers, nearly double its second-quarter 2020 retail unit sales.

Despite the many forces of disruption roiling the industry, most US dealers foresee the brick-and-mortar showroom remaining the cornerstone of light-vehicle retail. Sixty-two percent told us that they doubt the role of physical dealerships will drastically change over the long term. Most consumers seem to agree. Eighty-one percent of recent car buyers surveyed said that they still prefer going to a dealer to see, touch, hear, and drive vehicles before buying them. A majority of consumers also indicated an unwillingness to make such expensive purchases online and believe they would be unable to get all the information they need to make a decision.

The COVID-19 pandemic altered the way people work and buy daily necessities. In much the same way, stock shortages, the rise of digital dealers, and the transition to EVs are transforming how cars are bought and sold. The winners in the auto retail landscape of the future will be the dealers, online marketplaces, and OEMs that best combine the traditional advantages of the showroom with innovative digital solutions to create a seamless customer experience.

Most people are experienced online shoppers who love the experience of shopping digitally as much as the convenience. But if you asked online users to spend 15k, 20k or more on a practical purchase that is something they will live with every day for the foreseeable, such as a car, consumers tend to rethink this buying method. Kevin Allen, strategy partner at The Maverick Group, assesses why this may be changing for the car industry.

This early glimpse of new experiences made possible through HoloLens in partnership with Volvo, illustrates how we are thinking about the ways in which our world will be transformed in the not too distant future.

To get a clear picture of current industry trends and their implications for the future of car sales and the automotive aftermarket, including impact on OEM revenues and profit, this study seeks to answer the following key questions:

For each automotive trend, Deloitte forecasts a base case and a disruptive case of trend emergence. This reflects different manifestations of consumer, business, technological, and regulatory forces and lays the foundation for a nuanced assessment of trends. The study focuses on industry drivers with the highest potential for disruption, ultimately resulting in four main trends that will shape the future of car sales and the automotive aftermarket until 2035:

In the future, various drivetrains will coexist, with battery-electric vehicles leading the way. The emergence of alternative drivetrains is mainly driven by decreasing production costs, regulation, charging infrastructure, and increasing performance.

As an integral part of this study, a model to assess the quantitative implications of possible future states on OEM revenues and profit pools was designed. For each revenue stream, in both new and traditional business segments, it analyzed how levers react to the emergence of industry trends in order to calculate OEM revenues and profits.

Tesla and other electric car makers are conti


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