Automobile dealerships no longer provide value for consumers, concludes a research paper by INSEAD professor Karan Girotra.
"Car dealers and more generally intermediaries represent an extra layer of companies in the supply chain that clearly increases costs to customers," writes the prof.
The industry has evolved such that a consumer could search and research a car online, test-drive at a product gallery, and service a purchased vehicle at a reputable repair shop without needing the backstop of a manufacturer-certified dealership, concludes Girotra.
The overall tone at the Geneva Motor Show is positive as sales patterns in Europe have stabilized and even shown some pockets of strength. Perhaps the biggest question is if the sales gains are organic or the results of heavy discounting? Autohaus PulsSchlag reports price cuts of at least 10% at most major manufacturers.
European automakers are downplaying the impact on sales in Russia from the ongoing conflict in Ukraine. Russia is Europe's second largest automobile market and is expected to pass Germany within a few years.
Jeep unveiled its all-new 2015 Renegade compact crossover SUV. The model is unique in that it will feature seven different engine choices tailored to different global markets.
BMW announced plans to build over ten new smaller models on its latest platform. The Mini Clubman concept has created a stir with analysts.
New models from Ferrari, Lamborghini, and Maserati show that the ultra-wealthy haven't been forgotten by automakers at the show.
Nissan (NSANY) and Renault (RNSDF) will eventually lose a common thread when CEO Carlos Ghosn leaves the automakers.
Analysts are somewhat split on how a post-Ghosn scenario will unfold. Some see a risk as the "cement" that keeps the alliance between the two is removed, while others think the automakers are so tightly aligned that they can survive Ghosn's departure.
European car sales dropped for the sixth year in a row in 2013, slipping 1.7% to 11.9M vehicles, the European Automobile Manufacturers' Association says. That's the worst performance since ACEA began tracking the data in 2003.
However, the moderate recovery in sales that began in H2 accelerated in December, with new-car registrations climbing 13% to 906,294 vehicles.
Despite the pick-up, industry executives remain cautious. "The European car market is starting the year in its best condition for two or three years," said Yann Delabrière, the CEO of components supplier Faurecia. "But it is too early to say we have a clear vision of the turnaround." (PR)
Car sales in Europe are forecast to increase 2.5%-3% in 2014 as demand stabilizes in the region, according to a round of new forecasts.
Though discounts are expected to taper off during the course of the year, automakers selling in Europe will still face some pricing pressure and are burdened with too much capacity. Last year, sales came in almost 25% lower than the industry-high seen in 2007.