The challenge of digitalization for dealerships and distribution: what does the future hold?

On the occasion of the inauguration of the Hangar, our facilities in Pinto, at dealerBest we wanted to talk about the challenge of distribution in the automotive world. To do this, we have brought together people who are in direct contact with this topic to hold a conversation on the radio programme Sobre Ruedas, on Capital Radio:

• Paco Díaz, Managing Director of DealerBest
• Gerardo Pérez, President of Faconauto
• Jorge Tomé, Director of Opel Spain and Portugal
• Eduardo Divar, Managing Director of Kia Motors Iberia
• Antonio Gómez, Managing Director of Grupo Motor Gómez

PACO DÍAZ, CEO at Dealerbest

We are at a time when many changes are taking place in the sector that are changing the way people buy but which, in turn, offer new distribution opportunities.

At dealerBest, says our Managing Director Paco Díaz, “we firmly believe in automotive businesses, but we have to make this the starting point for developing creative, reasonable and attractive ideas so that the distribution business becomes a fully Smart objective: measurable, specific and realistic over time”, and this will be the key point of the mindset shift that will emerge in the automotive industry.

The main topic of this discussion is the digitalisation of dealerships and the new distribution landscape. Gerardo Pérez, President of Faconauto says that dealerships are “in a robust and comfortable market” and that they are “healthy networks that are more professional than ever.” For him, digitalisation is a major challenge in the world of dealerships, but there is a consolidation effect that intensifies these “professionalisation processes that are necessary to tackle this challenge, among many others.”

He firmly believes that this challenge begins with the possible division of digitalisation in dealerships into two parts. On the one hand, the digitalisation of processes, and on the other, the digitalisation of sales. Solutions are being sought to tackle these challenges and, according to Gerardo Pérez, “dealerBest can be one of those allies that help recover lost ground”.

However, manufacturers, dealerships and distributors still have a lot to do to meet the level of expectation of the end customer, who indirectly sets the pace, because, as Jorge Tomé, Director of Opel Spain and Portugal, rightly says, as a manufacturer representative, “the future of the business, regardless of the process and digitalisation, is the customer, someone with a very specific need, someone looking for a solution for their life and business and someone who wants convenience in their life”. This is where the importance of how dealerships and manufacturers communicate to achieve those objectives comes in, objectives that are indirectly set in this sector: meeting the needs that end customers require. And “whoever is able to achieve this equation will see an increase in business figures and a clearer vision of the business”.

But one thing is also clear: the customer right now, as Antonio Gómez, Managing Director of Grupo Motor Gómez, who is in constant direct contact with the customer, says, “comes with much more uncertainty”, which is why the role of dealerships is now much more important, because it is the moment when they have to explain everything in detail: what is happening, which car they should buy... However, he does believe that digitalisation has advanced, although the step that needs to be taken between the on and offline worlds is not yet that fluid.

One thing to bear in mind is that, in the distribution network, the dealership is a fundamental pillar, since, according to Eduardo Dívar, Managing Director of Kia Motors, “vehicles are sold in dealerships and they need to be happy and generate adequate profitability in order to develop the business and continue to invest in each of the brands”. This brings manufacturers and dealerships much closer together and they must send a clear message to the customer to avoid further confusion, making it more concise and, at the same time, reassuring.

It is at these moments that the importance of digitalisation in dealerships comes into play because, what does the customer expect from them? According to Gerardo, and other colleagues also agree, it is not necessary to have a large fleet on site, as the customer wants details and specific information that, ultimately, can be shown through another channel.

But there are also many other topics discussed at this table that condition both sales and distribution, such as those changes we mentioned at the beginning, like Madrid's anti-pollution plan, which make it necessary for manufacturers, brands and dealerships to work hand in hand to achieve the most Fresh solutions.