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Honda's New EV Friendly Retail Plans Hint at the End of Mega Dealerships

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【Summary】From simplifying the buying process to inventory changes, there's a lot that is going on behind the scenes at Honda. The automaker wants to design more flexible retail spaces that will offer a new purchase experience for its future electric vehicles.

Manish Kharinta    Jun 20, 2022 3:00 PM PT
Honda's New EV Friendly Retail Plans Hint at the End of Mega Dealerships

With the launch of the electric Prologue SUV co-developed with General Motors looming in Honda's future, the automaker is making some changes to its EV plans. 

The Prologue is scheduled to arrive around 2024 and is quite an important model for the company, so Honda is not leaving any stone unturned for its launch. From simplifying the buying process to inventory changes, there's a lot that is going on behind the scenes.

As part of the launch of the Prologue, Honda is planning some significant changes at the dealership level. The automaker is not only simplifying the process of EV buying for years to come, but is also dedicated to eliminating the frills of traditional car dealerships, which will result in less EV inventory, and smaller building footprints.

The traditional megaplex dealership, with big complexes designed for car shopping, might soon become a thing of the past. Considering the growing competition from manufacturers like Tesla and Rivian, it makes sense that Honda is determined to reduce the space for selling its EVs. The automaker aims to design a flexible space that will offer a new purchase experience.

Tesla and Rivian were the first to adopt this streamlined business model. Now automakers Ford Motor Co and Volvo are also employing direct online sales via the web for their EVs. 

For one, working out of small retail showrooms enhances overall efficiency and profitability. With that in mind, Honda wants to create its own virtual showroom selling its future EVs.

As part of these plans, Honda is redesigning its dealerships and is turning them into modern retail spaces. The automaker envisions a space where buyers can go for more infrequent maintenance services, as well as pick up their EVs after placing an online order.

It's safe to say that Honda's new vision does not seem that far-fetched, considering more modern-day marketing and business models. In addition, managing a mega dealership and securing an inventory of hundreds of vehicles requires substantial resources and a larger workforce.

In today's world, a more strategic approach would be to downsize the dealership to fit what EVs consumers actually want. The idea seems to work better than having vehicle models languishing at dealerships only to sell them at discounts later. But creating a smaller dealership for vehicles pre-ordered online could help automakers reduce their overheads.

However, it is worth noting that the automotive industry and the business model of selling cars is still in the early stages of digitalization. Furthermore, dealerships that fail to stay afloat often get acquired by larger auto groups. 

Honda's new dealership design will allow retail spaces to act as a quick pit stop in the purchase process. In addition to its new EV-friendly retail outlets, Honda is also working on an immersive virtual showroom.

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