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Young buyers prefer Lynk & CO's direct-sales model, dealers told
When Alain Visser gave a presentation for the direct-sales model of his new Lynk & CO car brand at the Automotive News Retail Forum, he knew that he was walking into a lion’s den of skeptics.
So he got right to it.
The Lynk & CO senior vice president told a room full of dealers that the brand is going to offer cars direct-to-consumer through a subscription model, so drivers can replace their vehicles every two years. Customers who really want to own their vehicle will be able to buy one, but that won’t be the way Lynk & CO advertises its models.
The decades-old dealer franchise model is not the right fit for Visser’s future-looking brand, he said. Rather than haggle with dealers, the millennial generation would prefer to buy a vehicle like they buy a smartphone.
His presentation used no less than four slides referencing Apple Inc., echoing the simplicity of Lynk & CO’s model lineup to control costs, its direct contact with customers, and taking their small-footprint stores to the heart of urban areas where consumers live.
Lynk & CO, which is owned by China’s Geely Automobile and built on Volvo mechanicals, will launch its first model, the 01 SUV, in the U.S. in 2019.
The 01 is designed around technology, always connected to a cloud computing platform. It has sharing technology built right in to rent the vehicle when not in use by the owner. Visser said it will be part smartphone and part automobile.
Lynk vehicles will be delivered to the owner’s home, picked up and returned for service, because young buyers have little interest in setting foot in a traditional dealership, he said.
One area where dealers could get involved: service, which is one of the more profitable parts of the business, Visser said. In Lynk & CO’s case, that would be Volvo dealers in the U.S., if they are interested. If not, that also can be outsourced.
“I’m assuming that I’m not very popular in the global dealer network,” he said.
Dealers have fought the direct-to-consumer sales model, saying it could undercut their business. Tesla has recently been the lightning rod of this issue, facing off against dealer associations in courts to clear the way for direct-to-consumer sales.
When he received the invitation to speak at the Automotive News Retail Forum, Visser said, his colleagues thought he wouldn’t attend because “that’s probably like a public lynching.”
To the contrary, said Visser. Dealers have been part of his life for over 30 years during a career at Ford, General Motors and Volvo, and, “I’m not going to turn my back to the dealers at this moment in my career,” he said.