Automotive Blog

ICDP celebrates 20 years.....

2014-02-12 11.37.44

I, together with some of you, first attended an ICDP meeting back in 1995, last century!

Coincidentally two decades ago I was also living here in Berlin and Leipzig setting up a Dealer Network in a very traditional way, from Rostock to Weimar, from Rugen Island to Chemnitz.  This model is almost the same today - however it doesn’t fit anymore with Customer expectations, nor those of the investors.  Dealers are losing money, and more and more are disappearing.

Today, in 2014, what has changed in the world?  We have experienced a range of huge revolutions:

  • A Digital and Internet revolution : from no PC to over-connectivity - banking activities on a CellPhone, YouTube videos on a tablet in the subway
    • And teenagers spend an average of 5 hours per day on electronic gadgets (Games, IPods, Iphones, Computers, etc) Even TV is becoming less popular now.
  • Since 2008 we have experienced the huge economic crisis - probably one of the worst in European history
    • Car factories closed and tens of thousands of workers were laid off during the last decades
  • A world that has drastically changed and moved Eastwards: from the Atlantic Ocean (= US and EU) to the Pacific Rims ( ASIA, RUSSIA and the US), growth and products flow from the East
    • The Indians bought Jaguar Land Rover and the Chinese have Volvo -  the same Chinese who over two years bought 25 Bordeaux Vineyards
  • Sooner or later, it’ll be time for Innovation. This might come from the Rising Sun Countries and mindsets? Who knows?
    • Will Bill Gates and Mark Zuckerberg successors be Indians or Chinese? Why not!
  • And what about the distribution model in the car Industry?  Very little has happened.
    • Some newcomers, who promised to innovate, did very little in the end

What about Tesla or Qoros distribution models in the years to come?  And what about the copy-paste policy from almost everybody in China?  Are we so traditional? Innovation closed?  So short minded ? One point is certain: this model is expensive, especially real estate and dealership buildings.

Now is the time to look forward, what will change in our automotive world over the next 20 years?

  • New mobility schemes, different uses of cars, probably City downtowns “à la London” in 50 Metropolitan areas with a huge impact on car sales
  • A different type of car: smaller and lighter, more environmentally friendly than today’s petrol engines and oil consuming models
  • Probably some of today’s car manufacturers will have disappeared, or will have been bought by Chinese or Indian operators, 20 new car brands will steer Asia and perhaps the world?
  • In parallel, new car operators / EV’s / leasing companies will boom.
  • And what about the distribution model?

That’s the key point: a disruptive model is coming soon.

All of us at ICDP believe – backed by collective experience and detailed research - that we have entered a period of disruptive change.

Automotive retailing and distribution is in a process of change that will lead to fundamental changes in the business model during this decade. We are diligently and continuously working on this: ICDP’s output has never been so necessary and vital.

We are convinced that there will be a strong and radical digitalisation of the industry, and at the same time, a complex-high value product with service and repair needs, will still need some form of physical network to support sales and service.

But also, surviving the change process and being a successful player in the future will need significant changes in:

  • Teams and people, (the right men and women at the right places, new profiles)
  • Processes and systems, (integrated, customer friendly)
  • Real estate and property (is building huge cathedrals still a must, or a protection of the past? Even for high value luxury brands?)
  • And most importantly, a change in attitude that reflects the move away from dealing to retailing.

And certainly a lot more that I cannot predict today.

Therefore, to help you think in depth and brainstorm, to sustain your own research, to challenge your options and ideas, it’s clear to me that the need for ICDP is greater than ever.

Eric Le Gendre was one of ICDP's first members when he worked for Peugeot in Paris, Eric is now ICDP's advisor in France.

Written by Eric Le Gendre
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