Dealers Love To Panic. They’re Not Alone.
Slumping car sales are scary but we’ve been here before.
By all accounts, January 1, 2000, was supposed to bring the kind of headache that even bad New Years’ Eve champagne can’t be blamed for.
For nearly a decade prior, scientists, experts and journalists had been warning us of the Y2K bug, a programming flaw in the core of every computer that was supposed to create millennial madness by crashing entire systems as the new century began — destroying data, menacing businesses and governments, and possibly even taking down the power grid.
People were panicked, city governments and utilities prepared for the worst, and then… absolutely nothing happened. So the experts shrugged, the pundits moved on to a new cause and we all carried on pretty much as before.
These days, the car business is dealing with its own version of millennial madness — namely whether the generation named for the dawn of the new century will keep buying cars.
And while early 2019 for dealers has been largely — but not totally — defined by slumping car sales, the industry-wide fretting about the issue is likely as much a product of our human psychology as it is a reflection of actual reality.
Fretting About The Future: It’s What We Do
From years of Cold War nightmares about nuclear annihilation to the prospect of population explosion to the generally accepted notion of Peak Oil, humans have long been fascinated by a frightening future that never came.
Lately, such thinking has been generously applied to the fate of the private automobile as industry watchers wonder whether we’ve hit Peak Car — that theoretical tipping point after which the worldwide auto supply will steadily dwindle due to a supposed combination of autonomous vehicles, public transit and a host of other potential car-threatening ghouls.
We at Fair have written previously about the realities behind this concept and its potential impact on dealers. But the psychology behind such doom-saying also needs to be factored into the conversation. Because we humans really do like to go all worst-case scenario — especially when it comes to our money.
In fact, our “sky is falling” mentality actually has its roots in business, beginning when we went from being hunter-gatherers to farmers, according to Duke psychology professor Mark Leary.
“For millions of years, life was lived mostly day-to-day, with no long-term goals to accumulate possessions, succeed, or improve one’s lot in life,” Leary wrote in Psychology Today.
But when the agricultural revolution began around 10,000 years ago, Leary said people began to think about the future a great deal.
“Farmers must plan for planting, as well as for how their crops will be tended, harvested, and stored,” Leary wrote. “Because so many things can ruin their yield, farmers fret a great deal about the weather, pests, and whether their crops will grow.”
Worrying: Nature’s Protective Blanket
One big reason we worry is fairly obvious: to mentally gird ourselves for a smack before reality can dole it out. In this way, downside thinking is a survival mechanism rooted in our genes — and is currently operating at full bore in industries as wide-ranging as farming and software.
But such worrying doesn’t reflect reality.
Even if we do end up seeing fewer cars produced and sold in the future, the consequences will most likely not be as sudden or cataclysmic as everyone’s worst fears, said Lucio Buffalmano, a psychologist, coach and founder of The Power Moves.
Besides self-protection, Buffalmano said downside business thinking is often perpetuated by those looking to disrupt current systems — which means feeding into it can actually help bring disruptive consequences to bear.
“I think that the predictors of doom and gloom are unconsciously seeking power,” Buffalmano told Fair. “They know fear-mongering always attracts more attention and followers than positive predictions or rational and bland ones.”
Worry Or Not, The Future is Coming
Then again, being in denial about obvious change isn’t beneficial either. And there are plenty of reasons to expect that the auto industry is indeed due for tremendous change in the coming years.
Trends expert Daniel Levine is the director of the Avant-Guide Institute, a group of global trend-spotters who seek out new ideas, products and general directions in business in culture. Unlike some other prediction flops, he tells Fair that the evolution of private automobile ownership is probably long overdue.
“[A]utonomous vehicles are definitely the future, and every major car company agrees with that,” Levine says. “So it’s up to us to connect those dots.”
And while the public has been attracted to dark and frightening visions for the future dating back to the days of Nostradamus, Levine says change in auto doesn’t necessarily mean things will be bleak for dealers.
“When peak oil was predicted in the 1950s, shale oil drilling was non-existent. And now — almost 20 years after it was supposed to happen — we are the number one producer of oil in the world,” Levine told Fair.
Levine says he tends to look to technology for solutions that will let people achieve mobility more efficiently than ever before, fully believing Silicon Valley will work directly with major automakers to help anticipate and adapt to those changes.
And while Levine says he’s excited for a future that includes autonomous vehicles and other perhaps unforeseen developments, he notes that things won’t change overnight. After all, somebody will still have to buy, sell and service the vehicles of the future — as well as the 1.3 billion cars that currently exist around the world.
That likely translates to a lot of opportunities for the dealers who embrace change and innovation — and, yes, probably still a lot of worry along the way.
