Automotive marketplaces are going to end up predominantly electronic. Who will be the winners? I envision one of 4 options winning out:
1. Established, licensed, brick and mortar dealerships;
They're advantage would be having test-drive-able demo cars on hand to see in person and a streamlined, direct connection and relationship with the manufacturer once ready to order, with personnel there to help guide and take care of such details as financing and all conveniently at one spot.
Unfortunately potential customers need to arrive on site, and some may even view shopping remotely from the comfort of home as preferable.
2. Established online marketplaces already exclusively focused with automotive;
This would be the likes of Carvana and CarMax. Convenient enough to do while dropping a duece, these services are already used and known, they're still growing, but I wouldn't consider them quite established in mainstream society.
These retailers lack an ability for potential customers to test-drive different makes and models. Also having effortless personalized customer service one-on-one with another human is lacking as well.
3. Established online retail behemoths looking to expand into a new retail market;
These are the likes of Amazon, Ebay, Mercado Libre, Rakuten, and AliExpress. They already have enormous online infrastructure and notoriety.
Yet they still lack experience over automotive and the possible details and nuances of this market and the cost of trying to learn may cost them enough to be bypassed and never successful and waste their resources to grow what they're already successful at.
4. Direct to consumer service provided by manufacturers themselves;
They could setup the online infrastructure, cut out the cost and inefficiencies of any middleman, pass on the savings to the customer, and absolutely obliterate the competition.
I find this scenario most unlikely as manufacturing is too involved, specialized, and focused a business with margins too tight to use up resources to try and accomplish this.
Someone will win out though. As history shows eventually people prefer ordering and shopping from the comfort and convenience of home…or while laying in hammock at their beach-house or camp, or even while commuting by train.
Overall my plan is to allocate 5% of my portfolio into this. Option 2 I'll choose to go in with 3/5ths of that 5% all ETF-style and spray my discretionary load all over that sector. The remaining 2/5ths I'll choose who I believe are the best 2 or 3 potential companies in each of the remaining 3 options.
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