Automotive friends: McKinsey & Company have just published an assessment of the US auto market’s readiness to sell and service electric vehicles.
(They are probably right that the transition is inevitable and will happen faster than most of us realize. But:
- It didn’t take much for 2020’s EV sales to surge over the previous year. There were more offerings, and the 2019 number surely was tiny by comparison.
- California accounted for 42 percent of all registrations in the country. Almost half! That’s seven times higher than Florida in the no. 2 spot!
- Their arguments suggest market demand isn’t driving EV adoption so much as subsidies (tax credits), regulation (fuel economy requirements) and manufacturers responding to pushes from the likes of the administration.)
Still, McKinsey is comfortable saying that, while ICE engines will be the most common car type through 2030, EV sales will make up 53 percent by that year. However it’s coming, it’s coming.
Now that that’s out of the way, the article is most certainly worth the read. It predicts some impacts: shrinking profit margins on the front end, increased need for finance and insurance products due to price tag and battery issues, decrease in parts revenue from “less mechanical” vehicles, more complex service and maintenance requirements, etc.
The practical suggestions–everything from preparing your frontline staff to changing strategy–are worth the read. You’ll get plenty of ideas on possible improvements you’ll want to make regardless of our looming future.
But.
Let’s not lose sight of the main thing. The adaptations the article suggest dealerships make are about a technology change that will have ripples throughout the industry. At the end of the day, will the most technologically sophisticated product win? How about the most technologically savvy dealership?
I think Steve Jobs gave us the answer in 1997. He had recently returned to Apple and was shepherding through the changes that would result in breakthrough products that changed the industry (iMac, iPod, iPhone, iPad–it was all yet to launch).
At Apple’s annual developers conference, a software developer challenged him from the floor that “you don’t know what you’re talking about.” He asked Jobs to justify and sell him on why the company had picked one particular software over another.
You could hear the tension in his concern: What if what you picked isn’t the best technology?
Steve’s answer (posted below): Who cares?
In his words, “You’ve gotta start with the customer experience and work backwards to the technology. …
“What incredible benefits can we give the customer? Where can we take the customer?”
Beware changing your processes to better suit the new shiny.
Beware making the customer change to help you instead of the other way around.
What incredible benefits can you give the customer?
Where can you take the customer?
Let’s center our efforts in designing a great experience for the people instead of pitching them a technology.
I’ll let Steve have the last word. May we all focus on the experiences our customers–and employees–receive with as much laser-sharp focus.