Old Man Lutz Gives Dealerships 20 Years to Live, Doubles Down on Driving Dystopia

Matt Posky
by Matt Posky

Longtime auto executive Bob Lutz has always been an incredibly outspoken individual. His years of hard work have given him an insight into the industry that few possess, and he’s only become more willing to share that information as he ages. Like the industrious caterpillar, his ceaseless labor has allowed him to metamorphose into what is arguably his perfect form near the end of his lifecycle — a candid automotive butterfly.

We love hearing anything has to say, as his insight borders on the surreal, but with more than enough truth to come to pass. Last year, he divined a future where the car as we know it is destroyed by governmental regulation and advanced technologies. The dystopian plot seemed impossible upon a cursory glance, but the deeper you drive, the more plausible it begins to seem.

Lutz refocused this week at the SAE International WCX World Congress Experience in Detroit, saying the traditional dealer model will be among the first things to go in the brave new world of mobility. He called car dealerships an “endangered species,” suggesting to the crowd that it had “another 20 to 25 years before it’s all over.”

“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.”

According to Automotive News, Lutz believes engineering and design will still be important in the short term. But ultimately, automakers will be required to ready themselves for future in which they either turn into fleet providers or go out of business. Once again, Lutz predicted a world where vanilla self-driving vehicles replace traditional cars — moving through traffic swiftly without any risk of collision.

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

He expects ownership to decline to a negligible level. Instead, individuals will have access to ride-hailing services that pick them up and drop them off wherever they please. “When you send [children] 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 mused.

We’ve poked holes in this argument before. While it’s certainly possible, the timeline Lutz presents seems extremely short. Autonomous development may be advancing rapidly, but recent events show there are plenty of hurdles yet to cross. Tesla’s Autopilot continues to garner controversy and Uber’s fatal collision with a pedestrian in Arizona proved how catastrophic a technical mishap can be.

There’s also that matter of efficiency. Urbanites would likely be well served by phone-based fleet access, but the situation becomes much trickier as things become rural. In addition to having to wait much longer for vehicles to arrive, having empty vehicles mill about in underpopulated areas wouldn’t be great for the environment. Autonomous cars will still expend energy and fleets will rack up miles much more quickly than personal vehicles that spend the majority of their time waiting patiently in a garage. We’re not sure how economical it is to digitally hail a self-driving car that has to make an extended journey every time it needs to pick someone up outside the city limits.

However, we like that Lutz is one of the few people with industry ties who’s openly considering the long game. For the most part, the government remains singularly fixated on the lives autonomous technology could save, while automakers focus on boasting about their technological achievements and the possibility of new revenue streams — like data acquisition and in-car marketing.

We don’t know if the future will play out exactly as Lutz has described. Still, there’s reason to give it serious consideration. While ownership rates went up slightly in 2017, leasing has been on the rise for years and many automakers have started implementing entirely new subscription services. Autonomous vehicles have also become a priority for most automakers, but even those that aren’t working feverishly on a self-driving car are still attempting to normalize semi-autonomous hardware that does at least some of the work for you.

Meanwhile, tech companies like Waymo and ride-hailing services like Uber are desperate to advance the technology for their own purposes. And all of this is being done without much in the way of regulatory oversight. The government appears to want the technology implemented just as badly as automakers and tech firms. If it continues with its hands-off approach, the market is likely to become flooded with autonomous cars while maintaining room for traditional vehicles.

But, if the government finds this new mobility to be legally incompatible with clumsy, self-driven cars and starts legislating their demise, we’ll know Lutz was right all along.

[Image: General Motors, via pontiacunderground/ Flickr ( CC BY-ND 2.0)]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • 87 Morgan 87 Morgan on Apr 12, 2018

    The residents of Montana, South Dakota, North Dakota, Western Kansas, Wyoming, Non-Front Range Colorado, Southern Utah, Southern New Mexico and huge parts of Texas (and many other rural parts of this great country) are pretty much 100% in agreement that in 25 years they will......own a car and or a truck that they will have purchased at some car dealership that is still in business. Maximum Bob is in his 80's. Enjoy retirement Bob, and as others have said. If you were so clairvoyant why didn't you do something to keep GM out of the BK court?

  • WildcatMatt WildcatMatt on Apr 30, 2018

    I really don't understand the binary outcome propositions that come out in these types of prognostications. As many have mentioned, a more realistic expectation is that autonomous solutions blossom in suburbia/exurbia which taper off as population density reaches a certain +/- density. That doesn't have to mean the death of the automobile or the dealership, although it does suggest that dealerships devolve to smaller-size mom-n-pop outfits much like bookstores in the Amazon age. There will always be places that Uber won't go. Today they're certain redlined urban areas. In the future it'll be dirt roads in the mountains. Largely I think the people who live in those areas will be fine with that. This suggests to me that the drive-it-yourself vehicle may be more SUV- or Jeep-like as the use case for the traditional sedan shrinks even further with market contraction. In suburbia I can imagine a reinvention of the city bus system. Instead of several buses running long routes to pick up a few riders here and there, I can see it becoming more hub-and-spoke in partnership with an autonomous vehicle in some areas: A pod picks you up and takes you a mile or two to a station where you get on a shuttle bus that runs every 10 minutes takes you directly to the business or shopping district. Or perhaps some innovation like the Auto Train, particularly things go the "pod" route. An automated pod picks you up and takes you to a station, where the pod attaches to other pods going to the same destination, using the highway but with an infrastructure that could leverage light rail lines as well depending on availability. In both cases you still have roads and you still have cars. If this can be done in a way to reduce overall congestion, the consummate reduction in risk should hold the line on the cost of car insurance for those that still want to drive.

  • Tassos Most people here who think it is a good idea have NO idea how much such a conversion costs. Hint: MORE than buying an entire new car.
  • Zipper69 Current radio ads blare "your local Chrysler, Dodge, Jeep, Ram dealer" and the facias read the same. Is the honeymoon with FIAT over now the 500 and big 500 have stopped selling?
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  • ToolGuy Personally I have no idea what anyone in this video is talking about, perhaps someone can explain it to me.
  • ToolGuy Friendly reminder of two indisputable facts: A) Winners buy new vehicles (only losers buy used), and B) New vehicle buyers are geniuses (their vehicle choices prove it):