When it comes to the future of automotive technology, the wheels are already in motion. Multiple European nations have set “sunset” dates for the internal combustion engine (ICE) and some major manufacturers have already announced plans to cease production. California has already announced a similar effort that would ban sales of gasoline and diesel-powered vehicles by 2035. It’s a brave new world, says auto and financial industry veteran Marc Spizzirri, and there are opportunities on the horizon. The ever-resilient car dealership sector needs to start assessing the new norms now and not in 2040 when they’re stuck between a rock and a hard place.
Phasing out the ICE has long seemed like a pipe dream. However, manufacturers like Tesla have shown us that it’s possible to run a showroom featuring nothing but electric-powered cars. Adding fuel to this transformative fire is major names like Mercedes-Benz no longer developing ICE engines. This is a massive shift and it’s only going to pick up more momentum from here. According to a November 2020 article from Automotive World, Europe is currently at the forefront of this sea change. “Scotland wants to end the sale of new ICE cars and vans by 2032, and the United Kingdom is likely to shift its current 2040 target to 2035, and might even move it further ahead to 2030,” the article states, adding, “France has a target to end the sale of passenger cars and light commercial vehicles using fossil fuels by 2040, and Spain has a draft law that would only allow the sale of zero-emission vehicles from 2040.”
While the article deems the California effort as North America’s “most ambitious in terms of timeline and vehicles affected,” it also gives dealerships a good idea of what’s to come. Marc Spizzirri, who provides special financial adviser services to dealers, has his thumb on the future of the auto sales sector. His experience as a retired car dealer also provides insider insight that could guide dealerships through changes that will occur under their own roof. As the U.S. Department of Energy points out, all-electric vehicles “require less maintenance than conventional vehicles because there are usually fewer fluids (like oil and transmission fluid) to change and far fewer moving parts.” A dealership that earns the majority of its income from parts and repair work may find it difficult to make ends meet when all-electric vehicles dominate the road. That’s not to say it will be impossible to run a profitable car-selling outlet, but the transition could be harsh unless preliminary steps are made now.
Marc Spizzirri has seen around the electric car curve and he still expects dealers to continue to enjoy profitability. Moreover, those looking to buy into the industry on the verge of this transformation could be making the best business move of their lives. This ICE-to-electric update is a long-overdue event in the “daily driver” commuter sector and it is coming down the road sooner than some may think.
