Established manufacturers have a clear advantage over start-ups when it comes to getting customers into cars, according to Luca de Meo

Dealerships will remain a core part of Seat’s sales network, as it gives the firm a “massive advantage” over starts-up car makers looking to seize opportunities to launch as the car industry undergoes change, according to Seat boss Luca de Meo.

Although de Meo has championed new ways of doing business, especially around opportunities from digitalisation and car sharing, he said the retail network was crucial to protecting a price premium for its products.

“Look at Apple - why do they stand above all the others on price when the product differences are not so big?” he said. “They open ‘cathedrals’ to their products to draw customers in. Now you see Amazon is building warehouses, as it needs to deliver on its 24-hour promise. A physical presence is a necessity, even for digital businesses.

“If you look at industries that have pushed down the online route only - from publishers of books to other electronics manufacturers, the price has only gone down.”

De Meo also highlighted that car buyers typically wanted a visible destination that they could return to if they had issues with their car, again strengthening the need for dealers.

“You can order your sushi online, but what happens if they bring you Thai food?” he said. “It’s the same with a car - you want someone to look in the eye and fix any problems with your order.”

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Comments
4

10 May 2019

 Let’s face it, most of us buy online, we can’t ignore it,more choice, less travel for us, but, buying a car without trying one first?, that’s why Garages will always be needed other than for the obvious reasons....

Peter Cavellini.

10 May 2019

So what he seems to be saying is that they need dealerships so they can charge more and then have someone to fix it when they make a mistake? As customer doesn't sound a good reason to me!

 

 

 

 

10 May 2019

De Meo has a valid point. No matter what, cars need to be serviced, fixed, treated. That needs a physical location. Even Tesla, one of the championings of online is the best-ever, says: take the delivery on the crap car and if something to fix or not satisfied with it, take it in (to a physical location).

If you just hope to rely on a set of web pages, like De Meo points, your only power & diferentiation is going to be on price, and that will need to go down with the time...

12 May 2019
The local dealership to me was multi brand and staffed by kids out of junior school, with no understanding of anything. Then for some reason the Seat part of it shut down, forcing me to drive 45 miles for a service. No thanks Seat.

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