Category: Industry Trends

Categories
Economy Industry Trends

2023 – Firing On All Cylinders

2023 will require dealer principals and their teams to fire on all cylinders to successfully weather the numerous challenges on the horizon. Economic uncertainty, evolving dealership sales models, fluctuating profitability targets, persistent staffing challenges, and continued growth in electric vehicles (EVs) are just a few of the issues which will impact retail automotive dealers.

There is plenty room for optimism for those dealers who put strategic plans in place, implement focused training protocols, bolster pricing models and fixed operations, and keep an eye on compliance. Let’s break down some of the opportunities for dealers to succeed in 2023.

EVs, sales models and customer connections

Growth in EVs and the hybrid instore and online sales model has highlighted the issue of strengthening and maintaining customer connections at the dealership. As more EV manufacturers sell direct to consumers, and consumers become increasingly comfortable buying a vehicle online, dealerships face challenges communicating with customers before, during and after the sale. Dealers who invest in implementing targeted sales processes and training will exit 2023 with more profitable businesses, greater employee retention, and stronger customer relationships.

Continue reading “2023 – Firing On All Cylinders”
Categories
Electric Vehicles Industry Trends

Finding Value In The Electrified Infrastructure

According to analyst firm BloombergNEF,  just over half of the passenger cars sold in the US will be electric vehicles by 2030. This growth is spurred by actions taken by the White House and Congress through the newly enacted infrastructure law. Legislative steps in California to adopt clean air standards will likely be supported by several additional states within the next five years. And finally, every major automotive manufacturer in the US have announced plans to accelerate production of battery electric vehicles (BEV), with many planning to eliminate the sale of internal combustion engine vehicles by 2050.

Clearly, BEVs are coming and more quickly than anticipated. Many dealers already have a smattering of these vehicles on their lots or are taking orders through their digital platforms. But, preparing to broadly support these new vehicles requires more than simply installing a charging station and creating some sales tools. Understanding the complete BEV infrastructure, means taking a deep dive into its impact on the physical lot, the service department and overhead expense.

Rather than being overwhelmed by the breadth and depth of these changes, savvy dealers will find the opportunities to derive more value – and revenue – by taking a strategic approach to implementing a BEV infrastructure. Upgrading the dealership in a planned, deliberate manner will deliver a competitive edge and a satisfied customer. Let’s break down the opportunities to generate revenue through purposeful infrastructure improvements.

Continue reading “Finding Value In The Electrified Infrastructure”
Categories
Economy Industry Trends

Successful Second Half Requires Flexibility

Do you have a strategic plan for the second half of this year? Granted, the retail automotive industry has been on a roller coaster lately. But now is the time to assess your dealership’s performance over the past two quarters and set some milestones to achieve your end-of-year profit metrics. A successful second half of 2022 will require some flexibility and willingness to change behavior.

Looking ahead, there are several factors which spell opportunity for dealers to capture notable revenue in the second half of the year. Strong consumer financial positions, credit terms which remain largely favorable, and continued pent-up demand bode well for savvy dealers. While the Federal Reserve has raised interest rates and recession rumblings linger, consumer financing is still discounted when compared to rates during the Great Recession. According to the Federal Deposit Insurance Corporation (FDIC) quarterly report, aggregate monthly personal income has rebounded to pre-pandemic averages and auto loan volume has recovered faster than in previous down-turns.

For dealers, these favorable credit terms also spell revenue opportunities for those who strategically manage their inventory purchasing and pipeline sales. While inventory and supply chains remain an issue, the wheels are beginning to turn and factories are cranking out more units, albeit maybe ones without heated seats or auto-folding mirrors. Used car inventory is also improving, with bulk-sellers like CarMax reporting sufficient inventory to meet 30 days’ worth of demand. Rising interest rates may also be working in the industry’s favor for once, prompting a bit of a cooling effect on demand and allowing OEMs to catch up.

Continue reading “Successful Second Half Requires Flexibility”