Disrupters are here to stay. Rivian’s efforts and Colorado’s acceptance of modified language are proof of that.
As companies such as Rivian or Tesla enter and impact the auto industry, and momentum builds for direct sales to consumers, traditional automobile dealers must evolve and continue to demonstrate the value of the franchise system.
We cannot stop startup companies such as Rivian and other disrupters in the industry. Rather, their presence should help dealers understand that we need to improve the way we interact with our customers and our dealership staff. We need to provide better customer service and make the car-buying experience more enjoyable.
How can a company that sells only 200,000 cars and trucks a year, operates exclusively through the Internet and delivers vehicles to customers’ homes take away from dealer business? It’s simple. Disrupters find voids in the marketplace and conduct business in new ways to fill the space.
So the question becomes: How can we adjust our way of doing business so that customers — who drive past franchised dealerships every day — do not feel the need to look elsewhere when shopping for a car?
I’ve been in this business for 40 years, and I know that if we do not evolve as dealers and adapt to an evolving marketplace, bills such as Colorado S.B. 167 will become the norm across the country, as legislators and consumers will demand more from their car-buying experience.
It is time we take a hard look in the mirror.
At the same time, I appreciate the Colorado dealers recognizing the original S.B. was 167 was broader than necessary and ignored what we all understand about the value of the franchise system.
Colorado law already gave Rivian the ability to sidestep dealers and sell directly to the public. Tesla, for instance, already owns and operates stores in Colorado, and Rivian can do the same — no legislation required. So we must ask: Why did they feel the need to take it a step further?
Interestingly, traditional automobile manufacturers seemed absent from the Colorado discussion on S.B. 167 as introduced.
While advocacy is not limited to legislative hearings, I did not see any public testimony from the large automakers whom Colorado dealers represent.
Perhaps this should be unsurprising. Ford, in addition to Amazon, is a major investor in Rivian.
Even so, I am certain it would have reassured dealers nationwide of the value manufacturers see in them had the Alliance for Automotive Innovation or any of its members testified against the once-threatening legislation.
