Automotive business model change - from B2B to B2C
To survive and thrive, automotive companies need to put the customer front and centre.
Automotive - a sector that hadn’t seen much change in its business model in many years – is now going through colossal changes. Car manufacturers are having to respond to Net Zero policies and the huge rise of customer expectations in the way they buy and own their vehicles.
"Traditional car manufacturers are both having to rapidly respond to the change in vehicle specifications driven by Net Zero regulations..."
In the UK, sales of new petrol and diesel cars will be banned from 2035. Traditional car manufacturers are not only having to rapidly respond to this change in vehicle specifications, they must also compete with disruptors as an emergence of new-wave electric vehicle (EV) manufactures enter European markets, increasing pressure with their agility and new business models.
Traditional car manufacturers are both having to rapidly respond to the change in vehicle specifications driven by Net Zero regulations, as well as the competition from disruptors as an emergence of new-wave electric vehicle (EV) manufactures enter European markets, increasing pressure with their agility and new business models
Customers are increasingly turning to the internet to buy their cars. A recent COX Automotive survey found 68% of respondents will do most or all of their vehicle purchase journey online. Just like the retail stores of the 1990s, automotive companies are having to create, consistent across online and stores.
Delivering these consistent experiences, particularly in store, can be challenging. Traditionally car manufacturers sold vehicles via dealerships, offering an indirect relationship with their end customers. This move to omnichannel brings direct customer interaction to the fore, forcing the move from B2B (business to business) organisation to B2C (business to customer) organisation.
This move from B2B to B2C requires a huge change from traditional car manufacturers in digital technologies, culture, organisation structures and sales models.
A seamless digital experience
Manufacturers that can dominate more of the digital journey will naturally outperform their competitors, as today’s customer is a digital customer.
Manufacturers need to change their culture to put the customer at the heart of every interaction.
Uniform customer experience
Where dealers used to be the final point of a traditional purchasing journey, they are quickly becoming one touchpoint as part of an inter-connected journey that the customer can trigger at any time. Consistent and shared data flowing from an automotive company to its network is crucial for providing a uniform customer experience, ultimately leading to increased satisfaction and loyalty.
Customer-centric organisational structures
New sales and services teams are needed to improve knowledge about the customer, gather greater influence on buying decisions, and identify new revenue streams.
"This move to omnichannel brings direct customer interaction to the fore, forcing the move from B2B (business to business) organisation to B2C (business to customer) organisation."
We have used our expertise at Oaklin to support our automotive clients in business model change, and in delivering exceptional experiences for customers. Oaklin supported INEOS Automotive, a start-up looking to disrupt the automotive industry with a direct-to-consumer retail and service model. Our team was central to the ‘Reservation Day’ customer milestone, the first time INEOS Automotive would transact with their customers, allowing them to place a reservation for their vehicle . We utilised our end-to-end service design approach to deliver a leading experience for customers and our efforts resulted in a successful launch which surpassed internal sales targets.
With another client, we were asked to shape and deliver their Network Transformation Programme. This programme aimed to create a differentiated retail experience by rethinking the company’s business model. The transformation programme targeted 180 dealer sites across the UK and has ambitions to realise over £30m in benefits
At Oaklin, we recognise the importance of centring around the customer, by placing the user at the heart of experience and service design. Our service design approach shifts the perspective from the product to the whole ecosystem. We design holistic services and experiences that exceed customer expectations and keep them coming back.
Stephanie Meehan is Oaklin’s Operations Director and International Business Coordinator. She is no stranger to consulting having previously worked at Deloitte, Andersen Business Consulting and the Berkeley Partnership. She has a master’s degree in health psychology as well as degrees in psychology and traditional Chinese acupuncture.
Joe is a management consultant with a proven record delivering digital transformation alongside clients in the private and public sector.
He is passionate about leveraging innovate solutions to generate growth, weather uncertainty and solve business challenges. Joe enjoys writing thought leadership papers, looking to explore sustainable business solutions via new technologies.
-  https://www.coxautoinc.com/wp-content/uploads/2023/01/2022-Car-Buyer-Journey-Top-Trends.pdf