Digital transformation and disruptive business models of new market players create unprecedented uncertainty in the automotive industry. One of the main reasons is the lack of understanding for the need of adapting business models to a changing business environment due to new technologies and shifting customer wants and needs. Even the automotive industry is not spared from digital Darwinism, according to which it is not the strongest or most intelligent of a species that survives, but rather the one that adapts best to change.
What opportunities do OEMs have to transform their business models? How can best practices be used to generate new value creation, and what influence does the transformation of the business model have on the ecosystem? What role will the dealer play in the future, and how can he still deliver added value to the OEM?
This paper provides an in-depth insight into the world of automotive sales, as well as a detailed analysis of the status quo. Best practices based on successful business model transformations of the top tier OEMs are the basis for a deeper understanding and serve other companies as foundation for developing digital business models.
The goal of this paper is to examine the impact of digital transformation on the dealer business model and how they can continue to deliver value to the OEM. For this purpose, guided expert interviews are conducted with 16 experts from various areas of the automotive industry. Subsequently, a qualitative content analysis according to Mayring will be used to assess the challenges and impacts of the agent business model and to develop improvement measures and key topics that offer added value for OEMs.
The results of this thesis support dealers in understanding their future role in the automotive industry and show design recommendations for a future-proof business model.
Table of Contents
1 Introduction
1.1 Subject of the Research
1.2 Purpose of the Research
1.3 Structure of the Research
2 Literature Review
2.1 Impact of Digital Transformation on the Business Model
2.2 Business Models in the Automotive Industry
2.2.1 Wholesale Model
2.2.2 Direct Sales Model
2.2.3 Agency Model
2.2.4 What’s about the Dealer?
2.3 Best Practices
2.3.1 Comparison of Business Model Approaches of successful OEMs
2.3.2 Key Takeaways for the Transformation of Business Models
2.3.3 Action Plan for the Implementation of an Agency Model
2.4 Effects on the Ecosystem
3 Method
3.1 Research Methodology
3.1.1 Quantitative Research
3.1.2 Qualitative Research
3.1.3 Quantitative vs. Qualitative Research
3.2 Data Gathering
3.2.1 Expert Interview
3.2.2 Different Types of Interviews
3.2.3 Guideline-based Expert Interview
3.3 Qualitative Data Analysis
3.3.1 Qualitative Content Analysis based on Mayring
3.3.2 Quality Criteria of the Qualitative Content Analysis
4 Findings
4.1 Challenges of Agents in the Agency Model
4.1.1 Limited Control over Pricing and Inventory
4.1.2 Digital Transformation
4.1.3 Change Management
4.2 Impacts on the Agents’ Business Model
4.2.1 Customer
4.2.2 Core Competencies
4.2.3 Sales and After Sales
4.2.4 Ecosystem
4.3 Measures for Improvement
4.3.1 Business Model
4.3.2 Location
4.3.3 Customer Experience
4.4 Added Value for OEMs
4.4.1 Customer Reach
4.4.2 Customer Experience
4.4.3 Local Market Knowledge
4.4.4 Customer Relationship
5 Discussion
5.1 Implications of the Results for the Automotive Retail
5.2 Design Recommendations for Agents for a future-proof Business Model
5.3 Limitations
5.4 Further Research
6 Conclusion
Research Objectives and Themes
The primary goal of this research is to examine the impact of digital transformation on dealer business models in the automotive industry and to develop design recommendations for creating a future-proof business model for agents. The core research question addresses how aspects of the dealer business model must evolve to deliver added value to OEMs despite the shifts caused by digitalization and the adoption of alternative sales structures like the agency model.
- Digital transformation and its disruptive influence on traditional automotive retail.
- Evaluation of different automotive sales models (Wholesale, Direct Sales, Agency Model).
- Strategic transformation and adaptation measures for automotive dealers/agents.
- Analysis of the changed automotive ecosystem and the role of data-driven value creation.
Excerpt from the Book
Impact of Digital Transformation on the Business Model
Despite technology transforming the world, the automotive sales and distribution model has remained almost unchanged since the 1980s. Digital transformation has changed the way people use media, interact with others or shop for fast moving consumer goods but unlike other industries the automotive sector has not truly adapted to this shift.
Customers have long since become accustomed to online shopping, yet established OEMs sell their cars to dealers, who in turn sell them to the end customer through bricks and mortar retail sites. As a result of experiences in other industries, consumer expectations of the automotive industry are rising dramatically, making a change in the sales model and an adaptation to customer preferences inevitable (Schiller et al., 2020, p. 06; Walton, 2019, p. 2).
OEMs and their partners must put the consumer first by addressing their needs and wants. Using technology to radically modify their operating models and reshape how consumers interact with their brand are important steps to bring the industry up to the necessary standard (Walton, 2019, p. 2).
Summary of Chapters
1 Introduction: Provides the foundation of the research, outlining the subject, purpose, and the structure of the study concerning digital transformation in the automotive dealer landscape.
2 Literature Review: Details the theoretical background, exploring the impact of digitalization, various automotive business models, current best practices, and the broader industry ecosystem.
3 Method: Outlines the qualitative research methodology, including data gathering via expert interviews and the qualitative content analysis approach based on Mayring.
4 Findings: Presents the analysis of 15 expert interviews, categorizing the challenges, impacts, improvement measures, and added value of agents in a transformed industry.
5 Discussion: Interprets the research findings, translates them into practical design recommendations for agents, and acknowledges limitations of the study while providing an outlook for future research.
6 Conclusion: Synthesizes the master thesis findings, confirming that while the automotive retail landscape is undergoing radical change, agents remain pivotal to the OEM's success through customer relationship management and local expertise.
Keywords
Digital Transformation, Automotive Industry, Business Models, OEM, Agency Model, Direct Sales, Retail Strategy, Customer Journey, Dealer Network, Ecosystem, Electromobility, Connectivity, Customer Experience, Data Analytics, Future-proof Business Model.
Frequently Asked Questions
What is the fundamental focus of this thesis?
The thesis investigates how digital transformation and the transition to new sales structures like the agency model affect the business models of automotive dealers and what future role they can play for OEMs.
What are the primary themes discussed?
Central themes include the shift from traditional wholesale models to agency or direct sales, the changing customer journey in an omnichannel world, and the strategic adaptation of dealers to remain relevant.
What is the key goal of the research?
The primary goal is to provide concrete design recommendations that help automotive agents transform their business models to be future-proof and continue delivering significant added value to OEMs.
Which scientific methodology is employed?
A qualitative research approach is used. The study relies on 15 guided expert interviews with automotive industry professionals, which are analyzed using qualitative content analysis according to Mayring.
What topics are covered in the main section of the paper?
The main section explores challenges in the agency model (such as loss of pricing control), the impact of ACES trends (Autonomous, Connected, Electrified, Shared mobility), and strategies for dealers to improve their operations and customer experience.
Which keywords best characterize this research?
Key terms include Digital Transformation, Business Model Innovation, Automotive Retail, Agency Model, Customer Experience, and Dealer Ecosystem.
How does the transition to the agency model specifically affect the dealer’s role regarding pricing?
In the agency model, the OEM typically takes control of pricing, which removes the dealer's ability to offer individual price discounts, forces the dealer to focus more on service and quality as a consultant rather than a purely sales-driven entity.
What specific value can a physical dealership provide in an increasingly digital future?
Despite digitalization, a physical footprint remains vital for complex product explanations, test drives, and personalized service delivery, especially for premium customers who value luxury experiences and face-to-face interaction.
- Quote paper
- Robin Mayer (Author), 2023, Impact of digital transformation on business models in the automotive industry, Munich, GRIN Verlag, https://www.grin.com/document/1339502
