Category: Industry Trends

Your 2018 To Dos

Post author By efgmarketing
Post date December 19, 2017

Contributing Author:
John Stephens
Executive Vice President
EFG Companies

It’s that time of year again when everyone evaluates their yearly accomplishments, both personally and professionally, and begins making their 2018 resolutions. So, what were the automotive industry’s accomplishments?

Despite a string of severe natural disasters, unit sales volume is roughly on par with last year’s volume. Both 2017 and 2016 represent some of the strongest sales numbers in over a decade. That’s a win in my book.

The Consumer Financial Protection Bureau (CFPB) is beginning to be reined in by Congress. After years of lobbying for more oversight over the CFPB, dealer and auto lending initiatives are finally making headway on the Hill. Talk about another reason to celebrate!

Going into 2018, pre-owned inventories are finally right-sized for consumer demand. There’s no longer too much or too little inventory. We’re now at “just right”. Because of this, pre-owned vehicles are holding their value, and dealers have a better opportunity to increase profitability through CPO programs.

Tags Auto Compliance, CFPB, EFG Companies, GAP reserves, John Stephens, Millennials, reinsurance

Industry Trends

Managing the Shifting Retail Automotive Landscape

Post author By efgmarketing
Post date October 30, 2017

Contributing Author:
James Ganther, Esquire
Co-Founder & President
Mosaic Compliance Services, LLC

As a retail automotive dealer, do you feel like the very nature of your business is changing right in front of you? Advances in technology are making it possible to conduct a good deal of the vehicle-purchasing transaction online. A new generation of car buyers who want more digital resources is rising in buying-power. Change is in the air. How will technology change the way F&I professionals ply their trade?

To answer that question, I have to go far from the realm of retail automotive to the cerebral world of TED talks. The third-most viewed TED talk of all time is Simon Sinek’s “How Great Leaders Inspire Action.” More than 35 million people have invested 18 minutes to watch an English/American author explain what he calls the “Golden Circle.” If you haven’t seen it, you can look it up on ted.com. It’s worth the watch.

One of my take-aways from Sinek’s talk has more to do with what he did than what he said. Sinek didn’t have any high-tech A/V presentation to back up his words. He used a flip chart on an easel and a fat black marker to illustrate his points. Sinek wasn’t an artist and his handwriting wasn’t all that good. Midway through his talk, his microphone failed and he had to be handed a new one.

Tags Digital F&I, How Great Leaders Inspire Action, James Ganther, Simon Sinek, TED Talks

Economy Industry Trends

Are Today’s Vehicles and Buyers Mismatched?

Post author By efgmarketing
Post date October 4, 2017

Contributing Author:
John Stephens
Executive Vice President
EFG Companies

On October 3, General Motors made an announcement that many in the retail automotive space had been anticipating. GM reported a 12 percent year-over-year increase in total sales in September to 279,397 units, driven by a 17 percent increase at Chevrolet and a nine percent increase at GMC. Crossover deliveries were up 43 percent and trucks were up 10 percent. Passenger cars were down 11 percent. Retail deliveries, which accounted for about 80 percent of sales, were up eight percent for GM’s best September retail performance since 2007. Not to be outdone, Ford Motor Co. said its sales rose nine percent, with a 21.4 percent increase in its F-150 pickup truck.

Some of this strong growth can be directly attributed to the recent natural disasters from Hurricanes Harvey and Irma. Economist Jonathan Smoke at Cox Automotive has said that 600,000 vehicles lost to the hurricanes in Texas and Florida will need to be replaced. Sales prompted by prior weather disasters generally increase within two months of the start of the recovery.

But there is more to this story. While truck sales have surged, passenger cars are down across the board, minus Toyota whose sales rose 15 percent thanks to the redesigned Camry sedan. So this begs the question – why are car sales stalled? Car manufacturers continue to throw money at the problem, offering incentives of over $3,500 per vehicle. Could the retail lot inventory be mismatched for consumer demand?

Tags Chevrolet, Cox Automotive, Ford, General Motors, GM, GMC, J.D. Power, NADA, Toyota