The Electric Slide: Dealers Shift Tactics to Sell Electric Cars

[AF News Desk]

The Tesla Roadster is an example of an electric vehicle being integrated into
on of our favorite markets: The sports car.

Years ago, the idea of having a car that runs primarily on electricity was a laughable thought at best. However, as time and technology have progressed, we now find ourselves eating our words and embracing the future of the automotive industry.

With names like Chevrolet and Nissan putting out cars like the Volt and Leaf, respectively, that have the capability to run on electric-only modes. This not only signifies a great leap forward for technology, but also fuel efficiency, with the Volt being capable of getting 93 MPG electronically in electric-only mode and 60 MPG in dual electric/gas mode (even the 36 MPG running on gasoline only is nothing to shake your head at).

However, just as the face of the auto industry changes, so do the tactics of those who are the auto ambassadors to car buyers everywhere. And just as they have with each new advance, car dealers are making way for strategic marketing that will hopefully bring the electric car market into the spotlight.

Even dealers whose primary product is an electric automobile are finding that tactics from two years ago aren't as relevant, which is why many of them are trying to move as the market does.

Below is a great piece on electric dealer changes and what has brought about this "shift," shift and what it means for their futures.

via the New York Times

Originally Posted by JOSIE GARTHWAITE, The New York Times - 6/8/11

For independent electric car companies, it’s so long, automobile row.

Some electric vehicle manufacturers have jettisoned the old model of franchise auto dealerships in an effort to change not only how we drive, but also how we buy cars.

“Because we’re ushering in a new powertrain, it’s an opportunity to say, ‘Should we shake up everything?’ ” Steve Burns, president of Amp Electric Vehicles, wondered in a telephone interview.

The conventional retail model took a PR beating last week, as some Chevrolet dealers were found to be selling the plug-in hybrid Volt to other dealers and claiming a federal green-vehicle tax credit for themselves, rather than making it available to consumers.

Some start-up E.V. manufacturers reject the old franchise model in favor of Internet sales or running their own stores directly, which can give the new companies a much-needed dose of consumer confidence.

In conceiving its showrooms, Tesla Motors looked to leaders in consumer electronics, particularly Apple. The company intends its stores to be places where people “spend time when they’re not looking to buy a car,” said George Blankenship, the former Apple and Gap retail chief who now heads Tesla’s retail strategy. The goal is to provide an enjoyable, educational and low-pressure customer experience, so that when a prospective buyer is ready to buy, “they’ll remember,” he said.

Coda Automotive, based in Santa Monica, Calif., plans to sell its Coda Sedan, priced at $44,900 before applicable tax credits, directly to customers through the Internet. But the company also intends to build showrooms staffed by representatives working without commission. Like Tesla, Coda is looking at high-traffic areas close to core markets, like the Westfield Century City mall in Los Angeles, where Coda is scheduled to open its first showroom next month.

That said, Bill Beasley, head of automotive sales at Coda, is not ruling out more conventional retail strategies, seeing “traditional dealership arrangements and big-box partnerships” as a way to increase the company’s retail footprint, he wrote in an e-mail.

Forging a new path is not without risk. As Tesla has noted in regulatory filings, some state laws intended to protect franchise dealers could prohibit or interfere with sales and marketing plans. And those high-traffic storefronts in affluent neighborhoods do not come cheap.

“To educate people on just your product, that’s really an expensive route to go,” said Mr. Burns. So far Amp has sold its vehicles through a distributor or directly to customers, and is still devising a plan for higher volume sales.

The old franchise dealership model does retain points of appeal, however. “A hundred years of car- making in the United States has produced this,” Mr. Burns said. “We don’t necessarily want to change it.”

Fisker Automotive, a California-based E.V. brand assembling its Karma plug-in hybrid luxury sedan in Finland, is taking a more conventional retail approach. After several delays, Fisker plans to begin selling its flagship sedan in July through a network of 45 dealers in the United States, with more in Europe and China.

There’s room to innovate even within the franchise dealership model, according to Jack Nerad, executive market analyst and editorial director for Kelley Blue Book. For example, Saturn, despite its later financial troubles, was able to create a “customer-friendly approach” to selling cars through dealerships that may appeal to cash-strapped start-ups, he said.

For the moment, Mr. Burns noted that both his company and other independent E.V. producers were “all living off the enthusiasts,” the early adopters who pay a little more to own new technology before their neighbor. By the time these early adopters enter Amp’s Cincinnati showroom, he said, they know what they want and what is available from other brands.

Mr. Burns expects a new generation of dealers to emerge that is versed in the pros and cons of different electric models as well as issues like charge-point availability. But the business of buying and selling E.V.’s, he said, would still require “somebody you trust shaking your hand,” whether virtually or in the flesh.

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What do you think? Does the automotive market have the prowess now - with mainstream entries into the marketplace - to make a substantial impact on cars purchased? Or is this just another growth spurt for a niche market that is still in its infancy?

Based upon what we've seen so far, I'd say if the future isn't now (and it may not be), it certainly isn't very far away.