Category: EFG Companies

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EFG Companies

Adding a Spark to EV Sales

The latest Gallup report sheds light on the current state of the electric vehicle (EV) market. Currently, only 16 percent of Americans are engaged with the EV market, either as owners or potential buyers, a figure that has remained stable over the past two years. This small number has prompted some automakers to scale back their EV investments while dealers struggle with moving units off their lots.

There has been slight momentum in 2024. According to Kelley Blue Book, nearly 269,000 electric vehicles were sold in the U.S. in the first quarter, a 2.6 percent increase from the same period last year, but a 7.3 decrease from the final quarter of 2023.

What’s behind this lackluster adoption? Industry analysts agree on three specific roadblocks: price, infrastructure concerns, and range anxiety. According to the Kelley Blue Book Report, EV ownership is currently skewed towards upper-income Americans with 14 percent owning an EV and 61 percent of lower-income respondents expressing disinterest in EVs.

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EFG Companies

Three-Pronged Focus Delivers Value

In October of this year, average new car transactions were about 21 percent higher than the same month three years ago when no end was in sight for the pandemic. Conversely, average transaction prices are also about 20 percent higher than in October 2020. Despite moving more metal, falling profits have dealers feeling particularly uncomfortable; hence, the automotive industry saw declines in the Q3 2023 Cox Automotive Dealer Sentiment Index, which declined for five consecutive quarters.

According to Cox Automotive economist Jonathan Smoke, “The latest index indicates that persistently high interest rates and lingering concerns about the economy and market conditions are dampening overall dealer sentiment. Franchised dealer optimism is on the rise, whereas independents are less hopeful due to affordability issues that more acutely affect the used-vehicle market and their businesses.”

With the UAW strike in the rearview mirror and inventory strong, there is room for optimism for dealers facing a hesitant buyer’s market. According to Kelley Blue Book data, new car average transaction prices (ATP) stayed flat month-over-month in October at $47,936. Cox Automotive reports that new vehicle transaction prices fell more than 3.5 percent year-to-date as downward price pressure continues to favor buyers in the market. Manufacturer incentives also increased to an average of $2,400 in October as OEMs lent support to move units off dealer lots.

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Dealership Training Economy EFG Companies Electric Vehicles Industry Trends

Educational Revenue Opportunities

Attention agents – it’s time to dust off your playbooks, education resources, and training best practices. Your retail automotive and powersports clients are going to need some knowledge in order to have a successful second half of 2023. Gone are the days when sales teams simply responded to pent up demand and took orders for units. Economic headwinds and rising interest rates are prompting consumers to delay purchases. And growing inventories are erasing those healthy margins logged over the last three years. Agents who focus on electric vehicle (EV) education, debt protection products, and sales best practices will prove invaluable to dealers who need to ramp up their level of customer service for a profitable close to 2023.

Let’s look at some of the issues facing your clients – and how you can help them overcome the challenges.

According to Kelley Blue Book and Cox Automotive, May new vehicle inventory reached its highest level in two years. The average listing price ended the month at $47,172, four percent higher than a year ago. To add insult to injury, interest rates on auto loans also continued to climb in May. Your dealer is working with a lot full of high-priced vehicles and consumers who are increasingly uncomfortable taking out a loan for a new car.  These challenges spell opportunity for agents to serve as the trusted resource for dealers, providing their staff with the tools and resources to make the most of every sale and maximize revenue opportunities.

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