It isn’t just the way our cars are powered that is altering in profound ways – the way they are sold is changing dramatically too.
It is a shift so radical that some believe it could herald the death of the car dealer, immortalised by Arthur Daley in the classic 1980s TV series Minder.
Since the days of Henry Ford, carmakers have relied on franchised dealers to sell and service their cars.
Manufacturers would deliver the models to the dealers and then it was up to their salesmen and women to shift them. They had discretion to offer deals and throw in perks and were rewarded with commissions based on the value of what they sold.
It’s also worth noting that the vast majority of the car market – by transaction volume – is of used cars. So the dealer modek still has some legs to it…..
We bought a second hand car in 1996. The salesman at the dealer was excellent. “May we have a test drive?” “Certainly, sir, would you like it overnight?” And so forth.
Same dealer in 2015: “May we have a test drive?” “Certainly, sir, as long as one of us comes with you and you stick to the main road.” And it turned out that they had misled us on features of the model anyway.
Fuck ’em.
The dealer system also provides a separation between consumer and manufacturer – which as Tesla is demonstrating can cause some legal problems and compromise the service and product being offered.
There are some strong reasons to want that separation to be maintained, even if the precise structure doesn’t stay exactly as it currently is.
Even then, the model has changed. There are giant car warehouses along the M4 in Wales. Tiny commission to the sales guys, which means the price is lower, there’s no haggling and the business makes up for low margin per car with volume.
I don’t need a fancy showroom, a pretty receptionist and a git to tell me about and sell me a car and try and slap £2K onto the price for that.
AndyT,
“The dealer system also provides a separation between consumer and manufacturer – which as Tesla is demonstrating can cause some legal problems and compromise the service and product being offered.”
That’s just because Tesla are disorganised. They aren’t making enough spare parts.
Dell laptops direct from Dell work fine. Dysons direct from Dyson work fine. I’d happily buy a Lexus from Toyota if they would let me.
Yarp. EVs are basically laptops on wheels.
Laptops are a heavily commoditised product, sold at wafer thin margins unless you’re Apple.
Chinese manufacturers are selling brand new electric cars in China for as little as £5,500, so you can see where the market is headed. The dealers’ profit margin is somebody else’s business opportunity. As WB mentioned, it’s now much more a volume business than it used to be.
@Western Bloke
“I don’t need a fancy showroom, a pretty receptionist and a git”
I recently bought some replacement rocker cover bolts* from a BMW dealer: you’ve described the parts department perfectly.
@WB
Don’t forget to add the “essential” extras like GAP insurance, fabric protection, paint protection, etc. which will cost you another £1.5k.
Steve,
I get why people used to have dealers. Like we used to have local computer shops with people who knew about them. But I had to buy a new laptop the other day. Needed it ASAP as one had died. Walked into Argos. Someone who knew sod all about computers handed me a box.
@Western Bloke
You could have gone to Currys, where someone who knows sod all about computers could read the back of the box to you and then hand it to you.
I have never gotten on well with Audi dealers. Every time I visited a show room I found them stuck up and rude. But only Audi dealers. No problems with Renault, BMW or Honda.
I am going to stick with my ICE car for now. I think the current crop of electric cars are really a bridge tech that is there to bridge the gap between ICE cars and the really environmental friendly cars. I am not convinced we will continue to make car batteries based on Lithium. I think we will move to batteries based on materials which we are already producing in great abundance. Stuff like iron or aluminium. It is not that I think we will run out of lithium. it is just that so many more lithium mines and processing plants will be needed that lithium batteries will become vulnerable to alternative battery technology. The makers of lithium batteries are going to lose their first mover advantage.
– Chinese manufacturers are selling brand new electric cars in China for as little as £5,500, so you can see where the market is headed.
The problem is that they’re not selling them at home (at the scale needed). The Chinese communist government has realised too late that their population is collapsing and they just aren’t going to have a domestic consumer driven economy. So these subsidised industries (EV making is a biggie) have to dump their inventory on the world. The yanks have already stuffed massive tariffs on them, and the EU will gradually, then quickly, do the same. European ports are already crowded with hundreds of thousands of unwanted Chinese EVs.
dearieme:
I think a dealership only needs to experience couple of people who get the car overnight with false ID and shift it to Africa on a boat, before they make the test drive a lot more restrictive.
Mass immigration kills everything, including all trust.
“European ports are already crowded with hundreds of thousands of unwanted Chinese EVs.”
Oh well we can just hand them over to the Ukrainian army. They’d be a very quiet way to attack the Russkis.
Or, the Ukes could convert them to quiet kamikaze car-drones, steering them from a distance electronically. They’d have a pretty small infra-red “signal” too. Actually, this isn’t a bad idea.
All my cars have been second-hand, and every time I’ve bought one it’s been through person-to-person via online market places. That has been significantly eating the dealers’ lunches.
WB – Indeed, my employer has cunningly offshored its IT functions to other people who know nothing about computers (Indians).
PJF – The Chinese communist government has realised too late that their population is collapsing and they just aren’t going to have a domestic consumer driven economy.
They’re not? Blimey.
The yanks have already stuffed massive tariffs on them, and the EU will gradually, then quickly, do the same. European ports are already crowded with hundreds of thousands of unwanted Chinese EVs..
Why on Earth do we need tariffs to keep out cars that aren’t selling?
PS – So these subsidised industries (EV making is a biggie) have to dump their inventory on the world.
If the Chinks want to subsidise our Net Zero bullshit, work their arses off to sell us products at below cost, why haven’t we bitten their hand off yet?
Yes please, I’ll take that deal.
“Why on Earth do we need tariffs to keep out cars that aren’t selling?”
So that Geriatric Joe can claim that the failure to sell Chinese EVs in the USA is all to his credit. There’s an election coming.
(Though I suppose it does imply that the Dems aren’t so confident of stealing the vote this time.)
PiP – Though I suppose it does imply that the Dems aren’t so confident of stealing the vote this time
The Blob is certainly restless. Have noticed multiple instances of self-important editorials in the Economist, Guardian and DT bemoaning the “risk” of Trump winning and causing “chaos”.
I’m not Counselor Deanna Troi or nothing (she has better tits) but It’s Afraid.
– Why on Earth do we need tariffs to keep out cars that aren’t selling?
Because, Steve, the Chinese (and their European sellers) are so far trying to sell EVs in the (lower) range of Euro style price levels. That’s not working (not for VW either) so they’ll be dump pricing their govt subsidized crap. The yanks know it’s coming, hence the big tariffs. You know, having a picky little sixth form debate with a casually written blog comment is not the same thing as understanding the world.
– If the Chinks want to subsidise our Net Zero bullshit, work their arses off to sell us products at below cost, why haven’t we bitten their hand off yet? Yes please, I’ll take that deal.
This is naive Tim style economist bollocks; just because we happen to be talking about twatty products (EVs) doesn’t mean we should suddenly be in favour of having hostile nations abuse trade to gut our economies.
– So that Geriatric Joe can claim that the failure to sell Chinese EVs in the USA is all to his credit. There’s an election coming.
Doddering Donald has sternly criticised the tariffs – for not being yuge enough. He just wants to win too; though he’s not wrong.
The US anti-Chinese-dumping tariffs cover way more industries than EVs. Obviously it won’t be named as such, but there is a bipartisan protectionist push to make America great again. The globalists haven’t noticed yet but globalisation is over.
PJF – Because, Steve, the Chinese (and their European sellers) are so far trying to sell EVs in the (lower) range of Euro style price levels. That’s not working (not for VW either) so they’ll be dump pricing their govt subsidized crap.
Ok. So, what’s the worst that can happen here?
Some lower income Europeans will be able to afford an electric golf buggy for the first time in their lives. (If they’re not up to Euro safety regs, I assume they’d be scrap already.)
Stop. Police. Murder.
You know, having a picky little sixth form debate with a casually written blog comment is not the same thing as understanding the world.
True, as I learn more I find I understand less, it’s quite troubling, but one thing I have learned and understood is that British employers don’t give a fuck about you. Would and will happily offshore your job to seven surly Indians – each one more delightfully incompetent than the last – if they thought it’d move the EBITDA needle by an infinitesimal amount. Are also delighted to agitate for Infinity Immigration, so the taxpayer gets to subsidise incompetent foreigners working in Britain. Double Dip!
But as soon as Johnny Foreigner comes along to eat Big British (or European) Shitco plc’s profit margins with more competitive products, waaaah! Unfair competition!
My heart bleeds for them.
This is naive Tim style economist bollocks; just because we happen to be talking about twatty products (EVs) doesn’t mean we should suddenly be in favour of having hostile nations abuse trade to gut our economies.
I remember hearing the same complaints about Japanese and Korean cars.
Bloody Asians, always trying to nefariously sell us stuff.
The globalists haven’t noticed yet but globalisation is over.
You are absolutely correct (*monkey’s paw curls finger*), but I earnestly hope we aren’t also already living in a time period that future historians will call “WW3”.
An historical irony: remember how the British, Europeans and Americans once sent gunboats and marines to China, to force them to trade with us? Now we’re threatening China that they’re doing too much trade with us. Chang might be starting to suspect this is a rigged game.
PJF,
“This is naive Tim style economist bollocks; just because we happen to be talking about twatty products (EVs) doesn’t mean we should suddenly be in favour of having hostile nations abuse trade to gut our economies.”
No, it’s not economist bollocks. It’s simply making you richer.
If a neighbour came around with extra apples because he’d grown more than he needed would you tell him to fuck off because it damaged Sainsbury’s? No, you’d take the apples because you’d be better off. So why is Nissan any different to Sainsburys?
Why do you people have such a boner for cars? You didn’t care when electronics or textiles went abroad. But cars are magically special because reasons.
I am not convinced we will continue to make car batteries based on Lithium.
As Tim frequently points out there isn’t and is never going to be (within the lifetime of anyone now living) a shortage of Li. You can make batteries without using Li, but they have lower energy density (weigh more for the same capacity), which is a huge no-no for vehicles (for the reason, check out the position of Li in the periodic table).
– It’s simply making you richer.
Western Bloke, you quoted my sentence but it seems there was something about “having hostile nations abuse trade to gut our economies” that you missed.
“If the Chinks want to subsidise our Net Zero bullshit, work their arses off to sell us products at below cost, why haven’t we bitten their hand off yet?
Yes please, I’ll take that deal.”
Well you’re an idiot then. The last thing we want to do is let our Lords and Masters force us to have EVs, because they are the thin end of the ‘You’ll own nothing and like it’ future they have lined up for us. And voluntarily taking up the cheap Chinese tat versions being offered is dragging the Trojan horse right into our midst. Once the majority have EVs the ICE infrastructure will be closed down rapidly, and you’ll be stuck with a milk float, which won’t be cheap any more but will still be shit, and will force most people into the ‘public transport only 15 minute city’ future the PTB frot themselves over at night (not for them, for the masses naturally).
So yeah, go and buy a cheap Chinese milkfloat, and condemn your kids to cycling to work in all winds and weathers for the rest of their lives, or being squashed on a stinking bus with a bunch of rapey diversity types every morning. All to save you a few quid.
Jim – And voluntarily taking up the cheap Chinese tat versions being offered is dragging the Trojan horse right into our midst.
Or, cheap Chinese cars might allow the masses to afford two cars: one for going into LEZ zones, and one for serious driving. And tempt more carless young people / poor people into car ownership.
You’re thinking zero sum, but I assume you know it’s not Chinese car companies insisting you do Net Zero.
So yeah, go and buy a cheap Chinese milkfloat, and condemn your kids to cycling to work in all winds and weathers for the rest of their lives, or being squashed on a stinking bus with a bunch of rapey diversity types every morning. All to save you a few quid.
Blimey. But I reckon they’ll go with something more like “That’ll be the Daewoo”, eh?
PJF,
“Western Bloke, you quoted my sentence but it seems there was something about “having hostile nations abuse trade to gut our economies” that you missed.”
So, would you cease all trade with China? No more TVs, smartphones, household items?
Steve,
“Or, cheap Chinese cars might allow the masses to afford two cars: one for going into LEZ zones, and one for serious driving. And tempt more carless young people / poor people into car ownership.”
Even outside of LEZ zones. There’s a little EV called the Citroen Ami that was designed for use by French kids with motorbike licenses, as they have a special classification that it meets. But it would suit a lot of old people, or wives. Costs £8K. Does 28mph, 45 mile range. If all you’re doing is shops, work, hairdresser, coffee with your friends, 45 mile range is fine, 28mph is fast enough. Have a Merc Estate as the family car for trips to the Dordogne etc.
“You can make batteries without using Li, but they have lower energy density (weigh more for the same capacity)”
I saw a headline today that said a good source of Li is the reject water from fracking. Let’s get drilling!
@Chris MIller
Aluminium air batteries have a higher capacity that Lithium ion. And I have always acknowledged that there is plenty of Lithium ion in the Earths crust. The issue is getting it out and getting it out in a time scale that is convenient for the electric car industry. Hence the reason to move to a battery tech based on another material. Aluminium would not be a bad choice.
Strange pointless conversation going on above. There’s not the slightest chance there’ll be sufficient electricity supply available to charge the cars within the next couple of decades. There will be neither the generation capability not the grid distribution capability.
@bis: I thought that this was a pretty good expansion of your point.
https://notalotofpeopleknowthat.wordpress.com/2024/05/05/the-uk-electricity-distribution-network-cannot-cope-with-evs/?unapproved=284601&moderation-hash=3362b6673f1f35e7d511bb4cdd067f51#comment-284583
Steve: We sent the gunboats to force the Asians to buy stuff from us so we could make money. They weren’t supposed to turn around and start selling stuff to us, taking our money off us.
“There’s not the slightest chance there’ll be sufficient electricity supply available to charge the cars within the next couple of decades. There will be neither the generation capability not the grid distribution capability.”
Which tells you our Lords and Masters don’t envision many of us having EVs at all, let alone 2 of them.
@dearieme
There are some amusing bits of “information” floating about, put forward by the equally clueless. One I came across last week was a doozy. “A newly invented battery by the Chinese will enable a car capable of covering 500 miles on one charge that can be recharged in 10 minutes.”
I leave it to those with a modicum of knowledge of electricity to work out the demand of the charger would be required. If you can’t do that, you shouldn’t be participating in this conversation.
@BiS
I hope I don’t have to lift the charging cable!
@M: thank you for that explanation. It hadn’t occurred to me – I lead a sheltered life.
But nonetheless if you can’t get a decent test drive what the hell is the dealer providing you with? When I buy a second hand car I don’t want a loan or a lease, or whatever, I just want to pay cash for a suitable car.
@Saker Falco
Al-air batteries are not rechargeable, and have loads of other problems (some of which can no doubt be solved with more billions and a decade of research). They have higher energy density because they use air to produce their energy, just as petrol has a higher energy density than TNT.