The Peasantization of Car Dealerships
Henry Kim ·
Yesterday, I had a deep discussion with my boss about the future of the automotive market. The core of our conversation was one thing: How will local dealerships survive in the age of AI? I had already foreseen the era of AI agents since setting last year's marketing direction. Look at current purchasing patterns. Dealerships and consumers gather on massive platforms, forming a kind of large marketplace. But will this search-based platform business last forever in the age of AI?
Global big tech companies are already coordinating their D-Day like a military operation to swallow up the transaction business. The threat I'm most focused on is Google. For a long time, Google was the primary contributor, guiding customers to us through its search engine. However, they are now moving beyond a simple search bar, aiming to build a vast ecosystem that encompasses everything from inventory management to purchasing, sales, and overall operations through AI agents.
What reality will unfold if AI agents dominate the market? Customers will no longer have to search tirelessly or scroll through screens. They will simply state their conditions, and AI will find the optimal listings, negotiate, and even finalize the contract. Dealerships won't need to engage in the cutthroat marketing of the past. They will only need to greet arriving customers with a smile.
But there's no such thing as a free lunch. In return, Google will take a share of our profits. I cited the example of Uber Eats to my boss. Just as restaurants are crushed by platform fees, dealerships will also have to split their car sales revenue with big tech. Traditional advertising will become useless, and large AI companies will reign as the true landlords of the market. Ultimately, local dealerships will become tenant farmers, cultivating the land owned by the big tech landlords, effectively acting as their agents.
The automotive market, with its immense scale, is the sweetest prey for big tech companies that need to show results in the near future. So, do we have no options for survival?
Of course, we do. Even in a world dominated by Uber Eats, there are certainly local restaurants that operate outside the platform and protect their net profits. No matter how omnipotent the solutions big tech pushes, they cannot directly dispatch armed soldiers into our local business territory.
The answer lies in the fundamentals. The target of a local business is not millions, but tens of thousands of local residents. Before becoming dependent on platforms, we must build our own database stronghold. Within it, we must steadily accumulate our own data and establish unique business logic that expands customer relationships beyond vehicle sales, growing them exponentially. If we hold firm control over robust demand forecasting and operational mechanisms ourselves, we won't need to fear the waves of giant platforms. Until they demand everything, we can cleverly leverage their infrastructure to our advantage.