AutoJournal September 2017
The July 2017 issue of AutoJournal is now available online. You can flip through it here, but first, a few words from the Editor in chief of AutoJournal, Jack Kazmierski.
The Paradigm Shift
China recently announced plans to ban diesel and gasoline-powered vehicles. The only thing they didn’t announce is when. That’s still in the works. The Chinese government says they’re currently working on a timeline that will see the end of both the production and the sale of vehicles powered by fossil fuels.
And China’s not alone in this. Both the UK and France have announced plans to ban diesel and gasoline-powered vehicles. Will other countries jump on the bandwagon? Probably!
Warning: profound changes ahead
I think the government official behind the announcement in China summed up the matter rather nicely when he said that this ban is going to bring “profound changes” to the car industry. China is a huge market, and carmakers can’t afford to lose out on sales there. They have to play ball. They have to come up with appealing solutions, and fast.
You can almost imagine the panic that’s sweeping the industry as engineers and executives put their EV development plans into fast-forward mode. We know the industry has been moving in that direction, but now, all of a sudden, the need to do so seems a bit more urgent.
It’s not that they don’t know how to build an electric vehicle. EVs have been on the market for years now. But how do you design and engineer a range of EVs that you can offer in markets where diesel and gasoline are banned, and do so at an affordable price, while still turning a profit? And how do you make these vehicles as appealing as they need to be in order to attract consumers?
Canadian dealers not immune
This “profound change” is going to impact dealers as well. Not only will they be selling these vehicles, but they’ll be servicing them as well. No, hold on a second. Maybe they won’t be servicing them. After all, how many oil changes does an EV need? How often do you have to flush the radiator or change the spark plugs?
Although EVs will need to be serviced, it won’t be the traditional oil change every 5,000 km that got customers back into the dealership on a regular basis in years gone by. This regular visit served as a way to solidify the dealer/ customer relationship. These regular service calls also allowed techs an opportunity to perform that all-important inspection in order to boost the bottom line.
In short, a ban in China is going to have an impact on dealerships in Canada. The only question is when, and to what degree? More importantly, are Canadian dealers going to be ready? Will they be able to embrace a new business model that has them selling and servicing vehicles in a different way? Will we all be able to keep up with this paradigm shift? Time will tell.