Industry Trends Training

Compliance Training Counts

We are nearing the end of the first full month with the new Administration and there has been a lot of activity from Washington. Vaccine distribution is rolling out, COVID-19 cases are trending down across much of the country, and Congress has a stimulus package to address. All of these actions bode well for the retail automotive industry, which is eager to ramp up sales.

There have been some notable actions around compliance. Former Federal Trade Commission (FTC) member Rohit Chopra has been nominated to head the Consumer Financial Protection Bureau (CFPB). During his tenure with the FTC, Chopra was active in pursuing abusive and discriminatory lending practices. Specifically, Chopra has signaled interest in establishing more protections against auto lending abuses, specifically for members of the military, Black and Hispanic consumers. If confirmed, Chopra would replace current CFPB head Kathy Kraninger.

And, while recent efforts on the virus front look positive, consumers have become accustomed to shopping online and this trend is likely to continue. Dealers who have successfully pivoted to a more digital sales model are expected to continue to see success. But an increased focus on compliance from federal, state, and local entities calls for a solid compliance training refresher for dealer sales and F&I staff.

Industry Trends

2021 – Same But Different

As December 31st rolled around, it felt like everyone was holding their breath, ready to put an extremely difficult year behind them. Then, the realists reminded us that the changing of a date really doesn’t wipe away all the challenges we are currently facing.

The 2021 challenges for the auto industry look much the same as they did in 2020. According to The Conference Board’s economic forecast issued January 13th, several factors will impact the US economy in 2021, including:

  • scale of the ongoing COVID-19 resurgence and any resulting lockdowns;
  • status of labor markets and household consumption;
  • size and timing of additional fiscal stimulus;
  • timing and availability of a COVID-19 vaccine; and,
  • degree to which volatility in the US political transition affects consumer and business confidence.
Industry Trends

Hope for 2021

Without a doubt, 2020 has been one of the most challenging years many of us have ever experienced. Yet, I am optimistic that 2021 will bring some sense of normalcy. It will take some time but I truly believe that when we reach the end of next year, we will all breathe a collective sigh of relief.

There have been some bright spots this year. Industry analysts report that 2020 is on track to be an all-time record year for dealership profits. Some factors driving those profits include right-sized new vehicle inventory levels, lower business overhead due to many expense cuts, and greater F&I revenue per vehicle. Hopefully your dealership capitalized on these bright spots and you’re ending the year on a positive note.  But I would be remiss if I didn’t caution you on some things to consider for 2021 – just to make sure you keep more of that revenue in your pocket.

Areas to watch for 2021

Inventory could be an issue for the first half of the year. According to Cox Automotive, dealers and automakers had 2.87 million unsold vehicles on lot in December – a 200,000 gain over November. While December is historically one of the biggest sales months of the year, this year may be different. The presidential election overhang and the lack of a December stimulus check could stifle those year-end purchases.