How is digitalization revolutionizing the automotive industry?

How is digitalization REVOLUTIONIZING

the automotive industry?

BY SEAN TOUSSI, GLO3D.COM

Digital technologies have drastically improved in recent years and have transitioned from being used by experts to being part of everyday life. Similar to the effect of electricity on communities, the advent of digitalization also has impacted everything profoundly. However, the speed of this change is different in an established company compared to a startup. All industries are now influenced by digital transformation, and the automotive industry is no exception.

With the introduction of new technologies, the auto industry is being forced to change the way it operates. In the past, it has been largely reliant on analog processes and technologies, but now we witness emerging changes, including but not limited to, autonomous driving, ride-sharing, connected supply chain, digitalized car buying process, predictive maintenance, and even remote diagnostics that open a new window of opportunity for businesses to develop innovative services.

DIGITALIZED PURCHASING PROCESS Two major disruptions in recent years have somewhat changed the traditional car-buying experience: the emergence of the mobile-first generation, and the pandemic. These disruptions, along with the arrival of new technologies like AR/VR and 360-degree views, have made digital car buying possible and accelerated digital transformation. Technology changed the game and the car buying experience is much different now.

With the internet, customers can do extensive research on their own and come into the dealership armed with information. AI-powered applications like 360 Car Photography Apps or Car Virtual Tour Builders help customers find out everything about a car with a click of a button. With advances in image processing, physical turntables and actual showrooms are getting replaced by digital marketplaces using a virtual turntable that showcases a great deal of information from every angle of the car. It allows consumers to explore their car of interest in a realistic way, seeing what it looks like inside and out and getting the most pertinent technical information. in price comparison and evaluation. These advantages increase the level of transparency, establishing trust between customers and car dealerships. This has led to a more relaxed and enjoyable carbuying experience. Dealerships will also benefit from these emerging technologies. A virtual tour builder gives dealers a chance to draw customers’ attention in a few minutes and get more qualified leads with serious buying decisions. It is a time-saving and cost-effective digital transformation in their business process.

THE NECESSITY OF ONLINE PRESENCE Auto dealerships still play a vital role in the market to such an extent that search volume for key phrases like “car dealership” doubled a few years ago. But according to Google, the number of times that customers visit a dealership before buying a car decreased dramatically. It means that people have made their visits more purposeful and determined. It is good news for a dealer, as well, to reduce the number of “maybe sales”! Google also reveals that over one-third of all car buyers start with an online search and about 70% of users are heavily influenced by interactive options like engaging 360 car

photos and virtual tour videos on YouTube compared to traditional advertising tools like newspapers, magazines, and other print content. The most interactive videos include highlights of features and options, as well as walkthroughs of the interiors and exteriors.

In response to these new demands, auto dealers need to provide their clients with a fantastic online experience. Websites and social media platforms should be optimized for every device - smartphones in particular - since 1 in 3 customers use their mobile device while searching for cars. Such an online presence allows dealers to have more touchpoints and increase the possibility of closing a deal effectively.

CONNECTED CARS In today’s digital age and mobile-first generation, customers are expecting similar seamless experiences everywhere. The same expectations are there for newer vehicles in the market. These expectations include everything from high-quality infotainment systems for passengers to assisted driving and parking with payment from the dashboard. Thanks to connectivity capabilities like Bluetooth and Wi-Fi, people can now watch movies, use Google Maps, and listen to music with Bluetooth connectivity. Smart vehicles detect drivers’ sleepiness using Galvanic skin-response sensors and can warn the driver of any harmful accidents. Also, radar, cameras, and laser scanners outside the car “read” the road and then respond. All the above features and more come preloaded or customized based on the demands of the consumer.

PREDICTIVE MAINTENANCE In order to address these changes, automakers provide new services to their customers like self-diagnostic systems. We can now become aware of the issue before it’s a problem. Data cloud connectivity will keep customers and car makers in contact. Vehicle servicing has become digitized, requiring not just mechanical attention and repair, but also a tech-savvy technician to maintain and update software. This integration never forces customers to leave their garages for routine car maintenance. General Motors, for instance, uses this technology to send monthly checks of the engine, transmission, anti-lock brakes, and other systems to the vehicle’s owner, reminding them when maintenance is due via email. n

The CARLAWYER©

Continued from page 10 had to check the box. The court found that the individual had checked the box. The hyperlinked agreements contained provisions notifying her that her information could be used “for our marketing purposes” and “for our affiliates to market to you.” The court noted that the Fourth Circuit has not addressed the issue of consent in the context of online disclosures like the ones in this case. However, the court relied on other decisions to find that when links to disclosures such as terms of service or privacy agreements are clearly shown and not hidden at the bottom of the page or in fine print, those prominent links satisfy disclosure requirements. See Beard v. John Hiester Chevrolet, LLC, 2022 U.S. Dist. LEXIS 204379 (E.D.N.C. November 9, 2022)

COMPLIANCE TIP Our Case of the Month highlights the Federal Development above that the Telephone Consumer Protection Act regulates “direct drop” or “ringless” voicemails as telephone calls under the TCPA. It also addresses the importance of ensuring that if you have a telemarketing campaign that you get the consumer’s prior express written consent to be contacted at the phone number they provide to your dealership. The dealer in this case had the consumer agree to certain terms of service, a privacy policy and privacy notice which included provisions that her information could be used for marketing purposes. The agreements were also clearly shown and not hidden at the bottom of a webpage or in the fine print. If you have a telemarketing campaign, what prior written approvals from your customers are you capturing? How are you displaying the disclosures or agreement to the customers? You’ll want to talk to a knowledgeable attorney about these issues.

So, there’s this month’s roundup! Stay legal, and we’ll see you next month. n

Eric (ejohnson@hudco.com) is a Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery®, a monthly legal newsletter for auto dealers and a contributing author to the F&I Legal Desk Book. For information, visit www. counselorlibrary.com. ©CounselorLibrary. com 2022, all rights reserved. Single publication rights only to the Association. HC# 4891-1017-2480.

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488 Firehouse Road Grantville, PA 17028

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Exotic Highline Sales every Thursday at 11 AM, Friday is regular sale stating

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21095 Route 19 Cranberry Twp., PA 16066

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Tom McDonald, GM Shawn Byers, AGM Zak Hanna, Senior Manager Client Service Justin LaScola, Manager Client Service Dealer

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Used Car Sales Gain Shares

By NIADA Dashboard

Used car financing gained in its market share in the third quarter of 2022, growing to 61.68 percent.

The figure was up from 59.66 percent for the same quarter of 2021, according to Experian’s State of the Automotive Finance Market report Thursday.

Opportunity open for independent dealers

The report showed a slight decrease in the sales for independent dealers to 47.46 percent from 47.67 percent in 2021. “It shouldn’t come as a surprise to see that the independent dealer volume dipped slightly in the latest data,” said NIADA

Vice President Jeremy Beck. “Our dealers have been fighting diligently in the lanes, online and in marketing to get inventory against deeper pockets of the franchise dealers. What’s encouraging is that overall used loans continue to increase as percentage of market share.

“As inventory levels come back online and interest rates continue to rise, it’s a great time to be an independent dealer. Consumers will be driven to our dealer lots by quality vehicles, a robust Certified PreOwned program that provides value and confidence to the consumer, and payments they can afford.” -Jeremy Beck, NIADA Vice President

Rates, prices continue to rise in third quarter

For independent dealers, 37.97 percent of loans were by BHPH dealers, with 24.76 percent of financing being provided by finance companies, 21.53 percent by credit unions and 15.43 percent from banks.

The used car loan amounts continued to grow, jumping 9.34 percent from last year to $28,506. For the third quarter of 2021, the average finance amount was $26,251 and $21,629 for the same time period in 2020.

The average monthly payment topped $525 — an increase of $53 from 2021. The average loan rate was 9.34 percent, up from 8.12 percent in the third quarter of 2021. The average loan term also grew from 66.97 months to 68.08.

The numbers were down from the first and second quarters of 2022. The average loan amount decreased by $104 or 0.37 percent from last quarter. n

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