Category: Industry Trends

Categories
Industry Trends

Managing the Shifting Retail Automotive Landscape

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

Continue reading “Managing the Shifting Retail Automotive Landscape”
Categories
Economy Industry Trends

Are Today’s Vehicles and Buyers Mismatched?

Contributing Author: John Stephens Executive Vice President EFG Companies
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?

Continue reading “Are Today’s Vehicles and Buyers Mismatched?”
Categories
Industry Trends Training

Preparing for a Car-Buying Surge

Contributing Author: John Stephens Executive Vice President EFG Companies
Contributing Author:
John Stephens
Executive Vice President
EFG Companies

As a native Houstonian and an automotive industry executive, I am closely following the news coverage of both the impact of Hurricane Harvey on the Houston area itself, and on the automotive industry within the area. A recent article from Wards Auto caught my eye, with the headline, “Expect Post-Hurricane Car-Buying Surge”. The article details how auto demand will increase in the extended aftermath of the hurricane as people evaluate the damage to their homes and vehicles, and begin receiving insurance payouts.

This is good news for those dealers who are able to quickly replace their damaged inventory with new vehicles. With an estimated 500 dealerships affected by the storm, it can be expected that while it will be a race to update inventory, there will be a period of “downtime” while both dealers and consumers survey their homes and businesses to understand the full scope of the damage.

When a large scaled natural disaster occurs, dealers can typically expect an upsurge in unit sales. However, this means that in addition to addressing inventory concerns, dealers need to prepare their teams to better manage an increase in foot traffic. In the immediate aftermath of a natural disaster, dealers have the time to undergo these preparations, and it’s important that they use that time effectively.

One of the biggest challenges during a car-buying surge is simply servicing the increased traffic. This could mean extending dealership hours, scheduling to have more employees cover the showroom floor for longer hours, and even hiring more sales and F&I team members to help spread the load. In addition to ensuring coverage, it’s important that your sales and F&I teams manage each customer’s time effectively.

Continue reading “Preparing for a Car-Buying Surge”