Congress Conversations Supplement - S6

But the former CEO of Ford Motor Co. also
remains bullish about the industry's long-term
health. "There's no industry that knows how to
adapt, survive and thrive like the auto industry,"
Fields said. "I'm absolutely convinced it will
flourish going forward."

his company is benefiting from its all-online-sales
approach. Consumers who were risk-averse to
buying vehicles online now demand it.
"All of a sudden, consumers are contemplating
things they wouldn't have before," Garcia said.
But just offering online sales platforms isn't good
enough. Customers still want a high-quality
experience across the board, including the service
lane. As such, dealers must rethink how they can
leverage digital technology to make consumers
comfortable, said PwC's Ekizian.

One critical success factor: Proactive support for
suppliers from the automakers.

Fundamental retail principles still matter,
however. Basic "blocking and tackling" has
never been more important than it is today, said
Sandy Schwartz, CEO of Cox Automotive. "It's still
extremely important to acquire the right cars at
the right cost and sell them at the right price,"
Schwartz said.

He also thinks the federal government should
offer incentives to consumers, perhaps early this
fall through something similar to the 2009 cashfor-clunkers program.

"If OEMs don't support their key suppliers," Fields
said, "their plants are going down. Just one issue
with one supplier can have a cascading effect."

In terms of technology investments, automakers
will likely favor electrified vehicles over
automated vehicles. One possible exception:
Commercial automated vehicles, which will
enjoy greater demand because of consumers'
increasing preference for home-delivered goods,
Fields said.

"This also is a really good time for companies to
ask questions like what have we been doing for a
long time that maybe aren't the right things, and
what opportunities exist that we haven't taken full
advantage of."

"

"It's an undiscussed secret in the industry right
now that there's no business model that shows
this (automated consumer vehicles) will make
money and earn, at a minimum, its cost of
capital," he said.

"Dealers should focus on
technology that makes a
difference...gets consumers
through the buying process as
far as possible without human
interaction."

Another possible trend: Demand for cars may
actually rise as consumers avoid ride-sharing
services and mass transit, which now are viewed
as unhygienic.
"Vehicles now are almost perceived as a form of
PPE (personal protective equipment)," Fields said.

- Sandy Schwartz, Cox Automotive

What will separate the winners from losers
among the automakers? Flexibility, innovation
and leadership - and a disdain for red tape.

OEMs Must Support Suppliers,

"In this scenario, you have to be very wary of
bureaucracy because time is so important,"
Fields said. "So when the team comes to you for
decisions, it has to be yes or no, but never maybe."

Innovate and Act Decisively
Automakers will face many challenges as they
ramp up production in the months ahead. Those
include fixing potential supply chain disruptions,
convincing reluctant employees that it's safe to
go back to work and establishing new hygienic
workplace protocols, said Mark Fields, a senior
adviser at TPG Capital.
6
Congress Conversations Supplement

Table of Contents for the Digital Edition of Congress Conversations Supplement
