When we talk about future of transportation and its potential impact on auto retailing, our intention is not to create chaos, panic or fear. Clearly the way I see it is like trying to bring a giant ocean liner to a stop while its traveling full steam ahead, the captain would have to calculate the stopping point way ahead of time in order not to miss the mark. Jet liners start descending and approaching airports sometimes almost an hour prior to lending since it takes time and logistics to land it safely. Likewise, even if it takes another decade for the transportation echo system to outdate current distribution, it also takes a long time to transform the retail concept, the process the culture and the beliefs in order to successfully make the transition.
We are still talking about electric vehicles making only 4% of total sales while the world is preparing to introduce over 100 new electric vehicles in the next 3 years. At the LA Auto show some manufacturers aggressively demonstrated their intentions of electrification this decade. VW is planning to become a full line electric car company within the next 5 years Hyundai was not too far behind them. California is on a mission to network 100-150 thousand public charging stations by 2025 in order to accommodate 1.5 million zero emission vehicles. Interestingly a robotic EV charging concept start up, “Power Hydrant” is developing an automated charging system to charge self-driving vehicles, a concept that will eventually become a must when autonomous ride-share distribution facilities start taking shape.
When we talk about organizing retailer body to form “Dealer Coalitions”, the idea is really for them to stay in the game and protect their assets. Ultimately 5 or 6 thousand ride-share centers will replace at least 10 thousand of the retailers in the next decade when its all said and done. Strategic retail operations with facility and land that sits on 3 or 4 acres are perfect candidates to operated 2000-unit autonomous fleets and still make reasonable bottom lines. In the meantime, coalitions will benefit its members to enhance their existing businesses until the time comes to transition. Let’s face it we are living through times where revenue is continuously shrinking at retail stores and yet expenses are still the same. Coalitions will provide substantial economies of scale not only in certain expenses but in marketing exposure as well. Much needed reliable data as well as cultural workshops will enhance processes, increase employee loyalty and makes happier customers. These are all the critical pieces in a retail environment which can no longer tolerate conventional styles. Retailers now must be educated and engaged with their businesses from individual performance measurements to stats and data collection and utilizing all of that information to fine tune their operations to maximize revenue while shrinking expenses. We will provide local workshops in 2020 in various markets and demonstrate the coalition concept its benefits and its gateway capabilities to the future of transportation.
I wish all of you a Happy Thanksgiving.