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How Will Automotive Retail Change in 2012? Is This The Year That the "One Price, No Haggle" Model is Resurrected?

We've all seen the Truecar commercial blitz by now and yesterday, I saw a Vehix commercial that appeared to be an attempt to piggyback on Truecar's message http://www.youtube.com/watch?v=GoEfU73YbOM.  Well come to find out, Vehix is now a Truecar affiliate / subsidiary.  There is a clear attempt underway to transform the way that cars are sold in the U.S.  A quick trip to Yahoo today showed that Truecar has indeed taken over the Yahoo Autos section and now has access to millions of potential car buyers. 

Will 2012 be the year that Automotive Retail is changed forever?  Clearly, there are issues with the way Truecar does business but I don't think these are hurdles that Truecar won't be able to overcome.  Let's assume for a moment that Truecar isn't going anywhere and they continue to get their message out to car buyers.  Judging by the response I saw when they launched their media blitz in November, the general public is in tune with Truecar's message.  As dealers, will we be forced to adapt to a completely transparent "one price" sales approach?  Do the manufacturer's secretly support this model?  In the Boston market, we've seen some of the larger dealer groups starting to experiment with the "one price" model again.  Some metro areas are dominated by a few mega dealer groups that can basically set the tone for that entire market.  If one of these groups decides to go down the "one price" road with all of their stores and aligns themselves with the Truecar message, we could see a series of dominos start to fall.  Let's use Herb Chambers as an example.  With over 50 dealerships in the New England market, wouldn't the competition be hard pressed to follow suit if Chambers became a "one price" group? 

I am 100% against Truecar and their agenda to change the way cars are sold but I wonder if consumers are going to force us to change the way that we do business.  I think now through the President's Day weekend is going to tell us a lot about which direction we will be forced to take.  When I initially saw some local dealers resurrect the "one price" model and running their "no haggle, best price upfront" commercials, I scoffed and said that it was doomed to fail, again.  Now, I'm starting to wonder if these stores aren't getting the jump on the rest of us by aligning themselves with public demand going into a 14 million SAR.

What do you think?  Will 2012 be the year where the "one price, no haggle" model is resurrected and forced on the industry?

 

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Comment by Keith Shetterly on January 2, 2012 at 11:33am

Mike was it you who I read that mentioned Vehix and TrueCar?  I guess they've got some kind of agreement with Vehix now, too?

Comment by Mike Warwick on January 2, 2012 at 9:04am

Thanks Keith, I think we are going to see a generational battle over which direction we go.  Clearly, the millenials want a different buying process but the baby boomers who have purchased many vehicles in their life from the same dealer are going to balk at the idea of paying the same price as a 22-year old first time car buyer.  It will be interesting to see which generation will exert more influence over the car buying process.

Comment by Keith Shetterly on January 2, 2012 at 8:51am

@ Mike:  It will be a transformative year--the question isn't whether the system will change, but HOW the system will change.  Your point about "one price" is one of the possible "hows" . . . certainly, if the haggle is out of it then the point will be completely a message of value and convenience.  Great and thoughtful article!

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