12 May 2019

Nothing seems to sum up the future direction of the automotive industry more clearly than news that Toyota and parts maker, Denso, are to invest $667m dollars in Uber’s self-driving car division. Toyota will also commit a further $300m over the next three years to build self-driving cars for Uber.

The Japanese automaker, for so long a leader in hybrid technologies, needs to buy into the future and recognises that it can’t afford to do it alone.

Meanwhile, at the other end of the progress spectrum, Volvo retailers in California are taking legal action to try to prevent the brand from launching a subscription finance package which, they claim, breaches the State’s restrictive franchising laws.

Retailers, not just in the US but here in the UK and Europe, need to decide where they stand on this. Change is coming whether we like it or not – we can fight it, we can ignore it or we can roll with it and try to find the benefits.

Electric cars will come first. Already National Sales Companies are mandating EV service and supply agreements to prepare dealerships. They cost money and, for the moment, it’s unclear how many actual customers there will be.

But electric cars are just cars, after all; they will still need supplying, funding and, to some extent, servicing. In all these areas, the retailer has a role.

Self-driving vehicles present more of a challenge. There will be fewer of them (than conventional privately-owned vehicles) but they will have higher utilisation. Initially they are likely to be confined to major cities and motorways where the infrastructure can cope.

So new thinking is needed and a new business model between manufacturer, supplier and service provider will need to be developed.

Toyota has recognised it needs a progressive technology partner. No retail group has $667m to spend but the long term future will depend on picking the right partners and being prepared to invest.

The decision at this stage is whether you want to be part of that future or not.

Rupert Saunders

Founder

Auto Retail Network

Tags: EV, Uber