Dealerships still key to an evolving industry, says Seat boss

Dealerships will remain a core part of Seat’s sales network, as it gives the firm a “massive advantage” over starts-up car makers looking to seize opportunities to launch as the car industry undergoes change, according to Seat boss Luca de Meo.

Although de Meo has championed new ways of doing business, especially around opportunities from digitalisation and car sharing, he said the retail network was crucial to protecting a price premium for its products.

“Look at Apple – why do they stand above all the others on price when the product differences are not so big?” he said. “They open ‘cathedrals’ to their products to draw customers in. Now you see Amazon is building warehouses, as it needs to deliver on its 24-hour promise. A physical presence is a necessity, even for digital businesses.

“If you look at industries that have pushed down the online route only – from publishers of books to other electronics manufacturers, the price has only gone down.”

De Meo also highlighted that car buyers typically wanted a visible destination that they could return to if they had issues with their car, again strengthening the need for dealers.

“You can order your sushi online, but what happens if they bring you Thai food?” he said. “It’s the same with a car – you want someone to look in the eye and fix any problems with your order.”