autoindustry

propanestudio.comsan francisco

newbusiness@propanestudio.com415.550.8692

private & confidentialjuly 19th 2013

agenda

• industry overview

• car manufacturers

• car dealers

• car buying behaviors

• leveraging new technology

industryoverview

statisticsindustry overview

cars on the road

245 M1

expected sales 2013 $15.5 M2

total salesjan-june$7.8 M3

average price of a car

$30,3034

dealership revenue$609 B5

new car dealers17,540 (US)1,307 (CA)6

1. Whitehurst, Roslyn. "The Number of Older Vehicles on the Road Increased More than 17 Million Since 2009." Experian. N.p., 27 June 2012. Web.2. Snyder, Jesse. "US Sales pace in August Projected to Top 15.5 Million Analyst Predict." Automotive News. N.p., 28 Aug. 2013. Web.3. Durbin, Dee-Ann. "Auto Sales Keep Picking up Speed." Philly.com. N.p., 04 July 2013. Web.4. MoneyBuilder. "Average Price of a New Car?" Forbes. Forbes Magazine, 10 May 2012. Web.5-6."NADA Data." State of the Industry Report 2012. N.p., 2012. Web.

holding companies

industry overview

General Motors (Buick, Cadillac, Chevrolet, GMC)

Volkswagen Group AG (Audi, Bentley, Lamborghini, Porsche, Volkswagen)

Toyota Motor Corp (Lexus, Scion, Toyota)

Hyundai Motor (Kia, Hyundai)

Ford Motor Company (Ford, Lincoln)

Nissan (Datsun, Infiniti, Nissan)

Fiat S.P.A (Chrysler, Dodge, Ferrari, Fiat, Jeep, Maserati)

Honda Motor Company (Acura, Honda)

BMW AG (BMW, MINI, Rolls-Royce

Daimler AG (Mercedes, Mitsubishi)

Tata Motors (Jaguar, Land Rover, Tata, Daewoo)

fastest growing car companies

industry overview

1.volks-wagen 2.BMW 3.BAIC 4.toyota 5.kia &

hyundai (tie)

6.SAIC motor

7.FAW group

8.Geely automotive 9.nissan 10.tata

motors

7."World's Fastest Growing Car Companies." Forbes. Forbes Magazine, n.d. Web. <http://www.forbes.com/pictures/eglg45fgfmj/what-auto-execs-think-3/>.

auto manufacturers by market share

industry overview

GM24%

Ford20%

Toyota19%

Chrysler-Fiat15%

Honda12%

Nissan10%

figure 1."Auto Sales - Markets Data Center - WSJ.com." WSJ.com. N.p., 04 Sept. 2013. Web

carmanufacturers

new technology

connected cars

the connected car enables the exchange of information between the car and its surroundings via the Internet. the connection is provided by a transmitter/receiver unit built into the vehicle or via a 3rd party system such as a smartphone8

8."Trend Analysis: Connected Car 2015." MBtech Consulting. Mercedes Benz Consulting, n.d. Web.

challenge vs. opportunity

car manufacturers

the challenge:

original equipment manufacturers are having difficulties generating revenue from connected cars for two reasons, first connected vehicles are costly to build, second it is hard to convert customers from the trial phase to adoption of the technology

the opportunity:

however, connected car technology has the ability to add significant value to customers through the creation of a better user experience and the continuation of ongoing customer relationships9

9."The Connected Car Industry Report 2013." Telefonica Digital. Telefonica Digital, 2013. Web.

benefits of connected cars

car manufacturers

1. increase in road capacity

a. one stretch of road will be able to safely accommodate more cars, eliminating congestion and reducing accidents

2. connected communities

a. connected car sharing could lead to a large reduction in vehicle ownership

3. personalization

a. every car could feel like your car, cars that come to your location and are smart enough to remember individual drivers’ preferences

4. virtual environments

a. heads up displays, that allows customers to keep their eyes on the road, sensors that recognize hazards and points of interest along the way10

10."The Connected Car Industry Report 2013." Telefonica Digital. Telefonica Digital, 2013. Web.

Luxury Vehicles Economy Vehicles

embracing connectivity

car manufacturers

built-insystems

nissan

built-in systems

system: NissanConnect partnered with Google, Pandora and Intel

features: real time traffic updates, predictive 5 day weather forecasts, hands free communication (texts and calls), music streaming

connectivity: customer’s Bluetooth phone

pricing: $1090 for the package, first 3 years free, after that yearly subscription

11.Nissan USA. N.p., n.d. Web. <http://www.nissanusa.com/cars/sentra/features/>.

volvo

built-in systems

system: Sensus Connected Touch partnered with Ericsson

features: full internet browser, real time traffic updates and directions, points of interest, service center locator, weather updates, voice control

connectivity: customer phone data plan

pricing: $2,058 for the package12

12."Volvo Sensus Connected Touch." Sensus Connected Touch. N.p., n.d. Web. <http://www.volvocars.com/intl/sales-services/sales/sensus-connected-touch/pages/default.aspx>.

mini cooper

built-in systems

system: MINIConnected USB integration

features: hands free voice recognition, music playlists, Google local search, apps (Facebook, twitter etc.), send to car, navigation

connectivity: customer’s Bluetooth phone

pricing: package for $2,25013

13."What Is MINI Connected? Official MINI Video." YouTube. YouTube, 07 Mar. 2011. Web. 27 Sept. 2013. <http://www.youtube.com/watch?v=1zvp7D5KGtE>.

porsche

built-in systems

system: Porsche connect

features: voice command, navigation, music and contacts transferring, mobile app

connectivity: customer’s Bluetooth phone

pricing: package for $93014

14."Bluetooth® Communications - Porsche Service - Service and Accessories - Dr. Ing. H.c. F. Porsche AG." Bluetooth® Communications - Porsche Service - Service and Accessories - Dr. Ing. H.c. F. Porsche AG. N.p., n.d. Web. <http://www.porsche.com/usa/accessoriesandservices/porscheservice/bluetooth/>.

gmc

built-in systems

system: Intellilink

features: internet radio (Sirius, Pandora), hands free calling, voice commands and controls, real time traffic and directions, points of interest, updated info about movies, weather and fuel

connectivity: customer’s Bluetooth phone

pricing: free for first 3 mo.,, then monthly subscription15

15."GMC." Infromant System. N.p., n.d. Web. <http://www.gmc.com/intellilink-infotainment-system.html>.

brought-insystems

mercedes

brought-in systems

system: Mbrace powered by Hughes Telematics

features: Send2Benz, route assistance, concierge, points of interest, location based traffic, in vehicle apps (Facebook, yelp etc.)

connectivity: monthly or yearly subscription

pricing: 3 package options ranging from $280/yr. to $14/mo16

16."Mbrace In-Vehicle Telematics Technology and Personal Assistance | Mercedes-Benz." Mercedes-Benz USA. N.p., n.d. Web. <http://www.mbusa.com/mercedes/mbrace>.

kia

brought-in systems

System: UVO system powered by Microsoft

Features: voice recognition, a Send2Car app, roadside assistance (crash notification and 911 connect), vehicle maintenance reminders

Connectivity: customer’s Bluetooth phone

Pricing: customer’s data plan17

17."Kia Motors - Experience UVO." Kia Motors - Experience UVO. N.p., n.d. Web. <http://www.kia.com/us/uvo/>.

toyota

brought-in systems

system: Entune uses mobile apps and data services

features: apps (iheartradio, movietickets, opentable etc.), stocks, fuel prices, weather, traffic updates, sports

connectivity: customer’s data plan

pricing: free for 3 years, then monthly subscription $5-$2818

18."Toyota Entune - IHeartRadio." YouTube. YouTube, 14 Dec. 2012. Web. <http://www.youtube.com/watch?v=vLGeXslNObU>.

combinationsystems

bmw

combination systems

system: ConnectedDrive uses a built in SIM card and iPhone integration

features: send-to-car app, heads up display, real time traffic updates, vehicle maintenance reminders, personal assistant (directions, destinations etc.), hands free calling and messaging

connectivity: customer’s data plan

pricing: 3 year trial period, then $182.21 /yr19

19."BMW Vision ConnectedDrive - How to Steal Jewellry." YouTube. YouTube, 12 Aug. 2011. Web. 2013. <http://www.youtube.com/watch?v=P-12wG6V46U>.

lexus

combination systems

system: Enform

features: app suite (pandora, bing, opentable etc.), real time weather and traffic updates, destination services, roadside assistance, stolen vehicle location, collision notification

connectivity: customer’s data plan

pricing: 1 yr. free, then from $139.50-$264.90 /yr20

20."2013 Lexus Enform App Suite." YouTube. YouTube, 14 June 2012. Web. <http://www.youtube.com/watch?v=dGwDUzKD9R0>.

audi

combination systems

system: Audi Connect w/built in wi-fi hotspot

features: Google earth, points of interest, travel information, weather reports, fuel prices, send to car, voice control

connectivity: customer’s data plan

pricing: partner with T-Mobile plans for $15/mo21

21."Audi Connect." In Car WiFi. N.p., n.d. Web. <http://www.audiusa.com/innovation/intelligence/audi-connect>.

chrysler

combination systems

system: Uconnect

features: built in wi-fi, in vehicle apps (iheartradio, Pandora etc.), emergency assistance (stolen vehicle, 911), voice texting, vehicle performance stats, send-to-car

connectivity: customer’s data plan and Bluetooth enabled phone

pricing: subscription from $9.99/day to $34.99/month22

22."Chrysler Uconnect." Chrysler Uconnect. N.p., n.d. Web. <http://www.driveuconnect.com/>.

ford

combination systems

system: Ford Sync

features: voice control for hands free calling and texting, music playback, turn by turn directions, vehicle health report, 911 assist, in car apps, built in wi-fi

connectivity: customer’s Bluetooth phone

pricing: subscription for wi-fi23

23."Ford Sync." Ford Sync. Ford, n.d. Web. <http://www.ford.com/technology/sync>

chevy

combination systems

system: Chevy MyLink

features: hands free calling/messaging, app integration (Pandora, Sirius Radio etc.), voice control

connectivity: customer’s Bluetooth phone

pricing: unknown24

24."Chevrolet MyLink." Take Control. Chevy, n.d. Web. <http://www.chevrolet.com/mylink-vehicle-technology.html>.

summary

connected cars

the internet of things is the way of the future. Auto Manufacturers will experience the most success when they are able to provide customers with personalized features they need at an affordable price.

opportunities for the future

connected cars

• interactive touchscreen interfaces

• mobile app development (send-to-car feature)

• heads-up display (Mercedes pointing prototype)

• enhanced car windows (Toyota zooming prototype)

• rearview cameras (Keio University Japan transparent backseats)

• augmented reality GPS (directions projected on the road)

new idea

car sharing

car sharing is a version of car rentals where users rent cars for a short period of time often by the hour or for the day. car sharing gives customers access to vehicles without the cost and worry of ownership.

bmw drive now

car sharing

• premium car sharing by bmw, mini & sixt available in san francisco

• users join and then receive their individual drivenow id

• they can locate cars via the drivenow app or site

• and drive for as little or long as they want ($12 for first 30 mins and .32 for each additional min or $90 for the day)

• cars can be dropped off at any drivenow station25

25. "DriveNow." BMW. N.p., n.d. Web. <https://us.drive-now.com>.

new idea

car clubs

car clubs allow individuals to purchase vehicle packages, giving them access to a variety of luxury cars. customers can experience these vehicles for a allocated number of days per year based on the their individual plans.

club sportiva

car clubs

• gives car connoisseurs access to a luxury fleet of vehicles for a monthly membership fee.

• the club takes care of the cost of depreciation, insurance and maintenance

• members enjoy the cars without the inconvenience of ownership26

26."Exotic Car Rentals, Exotic Car Tours, Club Memberships." Club Sportiva. N.p., n.d. Web. <http://clubsportiva.com/>.

summary

car sharing & car clubs

successful companies will have a wide reach and superior customer service. car pickup locations will be widespread and maybe, in the future the vehicle will drive to the customer. representatives will be accessible to customers via all digital channels, including in the vehicle interface.

opportunities for the future

car sharing & car clubs

• seamless and interactive websites that let users browse, schedule and reserve vehicles

• this also includes a mobile component for bookings on the go

• smart car interface systems that remember drivers preferences

• interfaces with video/audio/augmented reality capabilities that enable customers to access company representatives

cardealers

car buying goes digital

• dealers are no longer the source of product information

• buying conversations are happening online instead of at the dealership

• dealers are approached much later in the game27

27. Boyle, Matthew. "Why Car Dealers Are Failing Online Customers." Why Car Dealers Are Failing Online Customers. SlideShare, 27 Sept. 2012. Web.

carbuyingbehaviors

pre-shopping

buyers gather info online

pre-shopping

• 85% shop online first where they can easily compare prices and vehicle models

• 64% consult sites such Kelly Blue Book to get the manufacturer’s invoice price

• 25% have used or will use Facebook as a resource while shopping for their next vehicle28

28. "Have You Met the New Car Shopper?" 2013 New Car Guide. Cars.com, 2013. Web.

sites for buyers

pre-shopping

sites for buyers

pre-shopping

sites for buyers

pre-shopping

sites for buyers

pre-shopping

sites for buyers

pre-shopping

buyers explore financing options

pre-shopping

in addition to pre-shopping on sites, smart car buyers tend to deal with financing ahead of time.

• finance department is the biggest profit center for dealerships

• shop interest rates from local banks or credit unions

• bring newfound knowledge to the dealership and present it to the salesman and challenge him to match or beat your rate29

29. Munroe, Brian. "Buying a Car: What to Know Before You Go." Car and Driver. N.p., June 2009. Web.

dealershipshopping

the independent buyer

dealership shopping

• car buyers want to remain anonymous until they are ready to buy30

• they are interested in engaging with technology like mobile apps, interactive kiosks, and virtual videos to independently and easily access vehicle information

30. Bunkley, Nick. "Why Dealers Should Embrace 'the Age of Transparency'"Automotive News. N.p., 22 Apr. 2013. Web.

the independent buyer

dealership shopping

• use smartphones for tasks closer to purchase

• 33% feel that info attained from their mobile devices is essential in their vehicle purchase

• 43% use smartphones on the dealership floor31

31. "Have You Met the New Car Shopper?" 2013 New Car Guide. Cars.com, 2013. Web.

the independent buyer

dealership shopping

• enjoys engaging with a series of interactive kiosks and tv displays

• this allows customers to view features and build their own car from scratch

• tesla stores as pictured on the left, are an excellent example of this new dealership experience that is not only interactive, but incorporates digital technology

audi digital showroom

next generation experience

• audi opened the world’s first digital dealership in london during 2012

• the dealership is two story and features only 3 cars on display that rotate weekly

• customers have the freedom to wander the floors, interact with paint and leather samples and manipulate car designs via in store touchscreens

• customers can also schedule test drives, negotiate and purchase vehicles all from the digital dealership

• buyers believe this digital experience is much more relaxed and places them at the center of the buying experience32

32. Laird, Jeremy. "Audi's Digital Showroom Is the Ultimate Car Buying Experience."TechRadar. N.p., 03 Dec. 2013. Web.

summary

car buying behaviors

successful dealerships will be the ones that leverage technology to quickly deliver car buyers with customized relevant information. this information will be consistent and available on all digital channels. no matter what customers will be connected, whether they choose to pre-shop online or engage with mobile devices and other technology on the dealership floor.

opportunities for the future

car buying behaviors

• create intelligent, easy to navigate sites that combine all the resources customers (reviews, invoice price information, financing etc.) use when pre-shopping new cars

• ensure these sites are responsive and function seamlessly on mobile devices

• build smart interactive touchscreens that live on the dealership floor to engage customers

leveragingnewtechnologies

sales tool

mobile

• integration of mobile devices and apps for dealers to use on the sales floor

• features Include: direct communication and the ability to send tailored messages to customers, access analytical information and DMS and CRM integration33

33. "FUSION Mobile Car Dealer Websites." Click Motive. N.p., n.d. Web. <http://clickmotive.com/mobile-car-dealer-websites.html>.

dms vs. crm

the differences

dealership management system

• track vehicle inventory & sales

• calculate insurance & financing

• track customers (follow-up)

• manage accounting

• manage dealer website

• calculate commissions for sales staff

• track purchase orders

• manage parts inventory

• manage work orders

• schedule appointments34

customer relationship management

• track marketing efforts

• measure campaigns over multiple channels

• track client responses, leads and deals

• manage customer requests and rewards

• schedule appointments

• integrate social media35

34. "Dealership Management System." Wikipedia. Wikimedia Foundation, 09 Dec. 2013. Web.35. "Customer Relationship Management." Wikipedia. Wikimedia Foundation, 26 June 2013. Web.

sales tool

tablet

• intellacar is a way to revolutionize the sales process and empower reps to close more sales

• reps are led through the sales process from greeting to delivery

• they can even demonstrate car features through videos and illustrations and show customers instantly how different feature packages can enhance a car36

36."IntellaCar Is the Game-Changer That Transforms Shoppers IntoBuyers." IntellaCar. N.p., n.d. Web. <http://www.intellacar.com/>.

customer engagement tool

mobile

• creating custom apps that give loyal customers access to coupons and benefits

• features: dealer directions and contact info, inventory search and payment details37

37. Long, Kimberly. "The Importance of Mobile Websites for Dealerships." Internet Department. Auto Dealer Monthly, June 2011. Web.

customer engagement tool

mobile

• QR codes next to traditional window labels so customers can access information about vehicles quickly and easily

• features include: record of saved vehicles, book test drives on the spot38

38. Long, Kimberly. "Incorporating QR Codes into Dealership Marketing." Article. Auto Dealer Monthly, June 2011. Web.

inventory management tool

software

• VinManager allows dealers to access stock numbers directly

• they can use the VinCamera to take and upload photos and videos of vehicles and print customized window stickers

• dealers also have access to integrated pricing tools, DMS integration tool that automatically adds or removes vehicles from inventory39

39. "Take Your Automotive Inventory Everywhere." VinSolutions. N.p., n.d. Web. <http://www.vinsolutions.com/inventory-overview.aspx>.

other vinsolution tools

software

wholesale buying & selling tool

online

• allow dealers to purchase vehicles online instead of attending traditional auctions

• this allows dealers to sell non-moving inventories more quickly

• two sites dealers are using are OVE.com40 and ATC-Onlane41

40. OVE.com. N.p., n.d. Web. <https://www.ove.com/login>.41. "Manheim." N.p., n.d. Web. 30 Sept. 2013. <http://www.manheim.com/>.

vehicle financing tool

online

• dealers can finance any customer regardless of credit and streamline the entire process

• two sites dealers are using DealerTrack42and RouteOne43

42. "Dealertrack Technologies." Dealertrack Technologies. N.p., n.d. Web. <https://www.dealertrack.com/public/login.fcc?TYPE=33554432>.43. "Dealers." Route One. N.p., n.d. Web. <http://www.routeone.com/>.

summary

leveraging new technology

successful dealerships will be the ones that use technology to streamline their internal business functions and selling strategies. they will use software and other tools to manage and track inventories. additionally, they will educate sales staff to serve each customer with a personalized approach.

opportunities for the future

leveraging new technology

• develop online and mobile solutions for dealerships to manage inventories

• design apps that allow sales staff to easily show, share and save cars for customers

• develop apps that educate dealership staff on sales tactics (quiz or game something that is fun and interactive)

• design apps that project onto Smart TVs where sales staff and customers can close sales wirelessly instead of sitting at a desk

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