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Audi Seattle: The Threat of OEMs Selling Direct
In February 2024, the general manager and vice-president of Audi Seattle found himself having to consider the future challenges that could be in store for traditional automotive retailing. Despite having faced numerous challenges in the automotive industry over the years, such as recessions and factory strikes, he had remained dedicated to the car business in an ever-changing industry. Now, however, he was all too aware of the imminent threat posed by original equipment manufacturers (OEMs) selling directly to consumers. Franchise laws had historically shielded auto dealerships from such threats, but Tesla Inc. had bypassed these laws and was selling directly to consumers, altering the industry landscape. With franchise laws under threat and with some competitors already adapting to the shift, the general manager would have to act quickly in determining how to pivot to avoid revenue and market share losses. How should Audi Seattle adapt to the rapid changes taking place in the industry and secure its future? -
Carcierge: An Innovative Approach to Car Sales
In February 2016, the principal dealer of several European luxury automotive dealerships learned from Audi of America LLC (Audi) that he would have to relocate one of his dealerships to a new location. The relocation would be to a new market area and the dealer would most likely lose his current customer base. Instead, the dealer used the opportunity to create a new business model for auto retailing that could enable him to maintain his market share without having to comply with Audi’s relocation requirement. His new concept, named “Carcierge” and opened in 2016, was showing initial success, but the dealer wondered whether the boutique sales model he developed would be viable in the long run.