Car dealers: how the role of dealerships has evolved

In the automotive world, car dealerships have always been a crucial reference point for anyone looking to buy a vehicle. In recent decades, their role has changed significantly, following the evolution of the market, technology, and consumer needs.

But challenges for dealers are never-ending. Let’s explore this profession and the latest developments related to it.

Who is and what does the car dealer do?

The car dealer, or dealership, serves as an intermediary between the car manufacturer and the end customer. Its primary role is to sell new or used vehicles, accompanied by a range of services, from advising on vehicle selection to handling financing, as well as post-sales support, including maintenance and repairs. The car dealer also manages the vehicle inventory and customer relationships, going far beyond simple sales.

In an increasingly competitive market, the dealership has expanded its services to meet the increasingly specific needs of consumers. Today, in addition to sales, the car dealer offers leasing options, long-term rentals, and mobility services, making car ownership or usage more flexible than in the past.

The differences between a car dealer and a car broker

The roles of dealer and car broker are often confused, but there are substantial differences. While a dealership has its own store with one or more brands available for sale, a broker is appointed by a customer to handle all the paperwork and processes related to buying a car, from finding the right model to managing the bureaucratic aspects.

The evolution of the role of car dealerships

In recent years, the automotive market has undergone a true digital revolution. Buying a car online has become increasingly common, thanks to price transparency and the ease of comparing different models. In response to this transformation, the role of dealers has evolved from mere car sellers to true mobility consultants.

Dealerships have equipped themselves with digital platforms for managing online sales, integrated with services that enhance the customer experience, such as virtual tours, online test drive bookings, and customized vehicle configurations. In a world where customer experience is paramount, dealers must be able to provide quick responses and tailored solutions.

But that’s not all. One of the changes that will have the greatest impact on dealerships is undoubtedly the VBER (Vertical Block Exemption Regulation) 330/2010 by the European Commission, which will come into effect in 2028. This regulation, aimed at protecting competition, impacts the automotive sector.

Specifically, according to the European Commission’s assessment, agreements between manufacturers and dealers for the coverage of specific territorial areas limit consumers’ choice of distributor.

Under the new regulation, buyers will be able to choose the sales channel that best suits them and will not necessarily have to rely on a dealership tied to a particular car brand.

Although the VBER is set to come into force in 2028, dealerships and manufacturers need to start adapting to this significant change immediately by identifying new distribution models that comply with the regulation, meet consumer needs, and, of course, satisfy business requirements.