Why Bob Lutz still thinks dealerships are doomed

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Bob Lutz called dealers a “threatened species” because large fleet companies such as Uber or Lyft will simply buy their autonomous pods in bulk from the manufacturers.

DETROIT — Automakers, dealers and suppliers have two — maybe three — decades left before life as they know it is over, longtime automotive executive Bob Lutz says.

Self-driving cars will disrupt the industry and make many staples of the past century — including automotive retail, branding and design — obsolete. Lutz first penned his thoughts last year in the Automotive News series “Redesigning the Industry” and doubled down Wednesday during a keynote speech at the SAE International WCX World Congress Experience here.

“We’re in a historic transitional phase in the automobile business,” he said. “In order for the automobile to preserve its surface function, it’s simply going to have to evolve. We all know this end state is coming. It has to come.”

That end state includes fully self-driving vehicles that take passengers from point to point without human intervention.

Lutz predicts a future of mostly bland autonomous modules that can navigate freely thanks to detailed mapping and high-functioning sensors. They’ll seamlessly slip in and out of traffic on freeways and bunch closely together without any threat of accidents.

“Are they going to be fun? Absolutely not,” he said. “There will be no joy in sitting in an autonomous vehicle …. But it’s going to be enormously efficient.”

That’s good news for passengers, who can work, sleep or do other activities while in the vehicle.

He suggested that parents will be willing to place their children in autonomous cars to take them to day care, soccer practice or school. He said they would be able to give their children limited access to a vehicle subscription service that would let them call cars to take them to preapproved locations, and that access could be expanded as they get older.

“When you send them off to college, you won’t send them with a car, you’ll send them with a subscription to a driverless vehicle service that they can use at their leisure,” he said.

But that future is not good news for most of the industry’s traditional players.

Lutz called dealers a “threatened species” because large fleet companies such as Uber or Lyft will simply buy their autonomous pods in bulk from the manufacturers.

He said the importance of branding will shrink drastically because the modules will likely bear the name of the fleet provider instead of the badges of the automakers. He likened the modules to subway cars: Passengers don’t know who makes them, only that they get the riders to their destinations.

Engineering and design will still be important in the short term, Lutz said, and automakers must prepare now for a future in which they will either turn into fleet providers or go out of business.

“Don’t be depressed,” he told the crowd. “We’ve got another 20-25 years before it’s all over.”

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