October 31, 2016 — Want to know how the consumer is going to react in an autonomous world? It’s all about the horses. Not horsepower, mind you, but actual horses. And therein lies the key for why private ownership will not only “survive, but thrive” in a world of autonomous vehicles, according to Beau Boeckmann, president and COO of Galpin Motors.
In a speech during JD Power’s Automotive Marketing Roundtable in Las Vegas last week, Boeckmann argued that one only has to look at history to see what the future customer will want. “People have never been passive or indifferent about their own transportation,” he says. This was true even when the horse was the main means of transportation. The more you could afford, the better horse you would have — “whether it was the speed, health or beauty of the animal.”
People didn’t change as they moved into carriages and buggies. The wealthier they were, the more they were able to differentiate their carriages. Along with having the best horses, they could “ornately decorate their carriages to show status, with added comfort and convenience inside.”
Meanwhile, the advent of the train did little to change horse ownership at the time. “While the train did replace the horse to carry people great distances, it still didn’t replace the day to day use of a horse at home,” Boeckmann said. “In fact, people kept the barn next to the house. Why? Security, speed and convenience – if there was an emergency or if you needed to get somewhere fast, your horse was right there. This is still true today – in fact, we put our cars our in our homes, its called a garage. After all, in an emergency literally every second counts. Today, transportation needs are still based on these factors – security, convenience and speed.”
Boeckmann is reacting to the conventional group think in Silicon Valley that we highlighted recently that believes private ownership will be extinct within a generation because of ride sharing services such as Lyft and Uber along with the expected rise of the autonomous vehicle. A couple of weeks prior to the JD Power conference, Lyft co-founder John Zimmer predicted private ownership in major metropolitan areas will be gone within 10 years.
The Valley comes to that conclusion based on the so-called inefficiency of owning a vehicle that sits parked 96% of the time. But it’s a notion that ignores the realities of ownership and the fact that convenience and differentiation are driving motivations for why people do and will want to own their own vehicles — autonomous or not.
Of course, Boeckmann has a vested interest in seeing private ownership survive. If it goes away, he doesn’t have a business. But to say that the Boeckmanns and other like-minded dealers are dinosaurs unwilling to change with the times — as one purveyor of a new retail model recently suggested to me — fails to to grasp the connection dealers such as Boeckmann have with the customer. (And, yes, the model has to evolve and improve, and it is with many dealers).
The Boeckmanns have been part of the automotive landscape for 50 years. Galpin Motors has been the number one volume Ford dealership for 26 consecutive years along with being the top dealer for numerous other brands. The Boeckmanns have turned Galpin into a destination — a Disney Land for car buyers. It’s Galpin Automotive Sports division has been a leading influence in the enthusiast market. The point is, dealers such as the Boeckmanns understand and know what customers want.
I’ll end this column with the following quote from Boeckmann because it captures the mindset of the consumer and why they will continue to buy cars well into the future.
“The core argument here, is that the autonomous vehicle will eliminate the need for private transportation. This makes no sense to me if we consider many of the reasons we buy cars today… security, convenience, comfort, privacy, pride of ownership, status, individualism, and heck, for fun. 16 And if we add all the benefits autonomous vehicles have to offer, who wouldn’t want to own their own private Autonomous car?! And while some will feel comfortable sharing, others will not. And isn’t that what it is all about, freedom of choice?
So I believe people will want and enjoy their own autonomous vehicles as well utilize ride hailing autonomous services. I believe strongly that private ownership will not only survive, but thrive in an autonomous world.”
(Author’s Note: The quotes are from a transcript of Beau Boeckmann’s speech at the JD Power event, which I was unable to attend. I was across the hall at the Bellagio Hotel in Vegas moderating an investor panel at the AutoVentures Conference at the same time he was giving his presentation.)