Disruption has become a business norm across industries, but it would take some searching to find one facing more disruption than auto dealers. Electric vehicles are poised to displace not only the internal-combustion cars and trucks that have ruled the roads for more than a century, but also a sizable chunk of the service revenues traditional vehicles generate (EVs are much simpler, mechanically speaking). OEMs such as Tesla are going direct-to-consumer. Consumers are buying cars and arranging for service through their phones – when they’re buying cars or having them maintained and repaired at all, as many prefer mobility-as-a-service anyway (fully half of all new cars are being sold to fleets).
Yet these disruptions are on different timelines and will have varying impacts, and even as these sea changes wash in, dealerships must optimize the efficiency and profitability of their existing business, Peter Lindtner explains. He ought to know.
Lindtner is CEO of proaxia, a Switzerland-based software firm specializing in dealer management systems including its proaxia VSS for SAP’s industry cloud. “VSS” stands for “vehicle sales and service,” but among the cloud solution’s core aims is to rapidly enable new business models within and beyond those bounds.
“If you have disruptive worlds, then you answer with new business models,” Lindtner says.
The beauty of SAP’s industry cloud, though, is that one can harness the flexibility, scalability, and continuous updates inherent in cloud applications in general; the artificial-intelligence, analytics, and other capabilities of SAP’s Business Technology Platform in particular; the robustness of SAP S/4 HANA; and the dealership-specific functionality that proaxia specializes in, Lindtner says.
Taken together, he says, “you can move forward as fast as you want, and in a way you want, very individually,” adding that, “our solution, because it is embedded in the industry cloud, is future-oriented and innovation-oriented.”
One example is the proaxia’s SAP industry cloud solution’s ability to support online and on-premise selling simultaneously, enabling higher sales through both channels and boosting customer satisfaction as well as, ideally, retention. All the while, the solution helps trim service as well as back-office and logistics costs by optimizing the process flows underlying them.
“So, it’s innovative. It’s optimizing the revenues. It’s optimizing the costs. And in the end, of course, hopefully the profit, not only in the short term as is necessary for the traditional business, but also for the long term as a sustainable revenue and profit model,” Lindtner says.
In the disruptive world of auto dealerships, reassuring words indeed.