Tag: Wards Auto

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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.

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Dealership Training Industry Trends

Are You Ready for the Digital Revolution?

Hollis Goode Regional Vice President EFG Companies
Contributing Author:
Hollis Goode
Regional Vice President
EFG Companies

By most accounts, the digital revolution has already occurred. We began shifting from mechanical and analog technology to digital electronics between the late 1950s and late 1970s. However, while industries across the U.S. changed their working dynamics to accommodate the digital revolution, vehicles are still fundamentally sold today the way they were 50 years ago.

Consumers still have to go to the dealership, fill out tons of paperwork, and sometimes spend hours waiting for funding paperwork to be finalized. Conversely, when was the last time you went to a bank to apply for a credit card, or even a mortgage? Now, banks have a fairly robust digital presence, where brick and mortar locations are seldom used.

In 2017, more than 30 years from the “end” of the digital revolution, the automotive industry is just now beginning to undergo its own revolution.

According to a recent study by J.D. Power on top trends to improve the retail automotive experience, 42 percent of dealership consumers made phone calls to dealers when shopping for a vehicle. Conversely, 75 percent of consumers used the internet. However, those buyers who rely on the internet had lower satisfaction scores than those who made a phone call. The reason for this can be easily explained by the current dealership model, which is geared towards bringing people into the dealership.

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Economy

Watching the Economic Pendulum?

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

The retail automotive industry has been riding a five year high with average 8.30 percent year-over-year increase in unit sales from 2011 to 2015 according to data from Wards Auto. With the rapid pace of automotive industry growth lending requirements loosened, longer term loans became the norm and more customers who had been holding off on purchasing a vehicle returned to dealerships.

Just like within any economic cycle, after a period of expansion, the pendulum swings to a period of economic reduction. And, everyone is avidly watching the signs to see when that pendulum will start to swing.

Experian’s latest State of Automotive Finance Market Report listed  average new vehicle loan terms increased to 67 months in 2015, while used vehicle loan terms increased to 63 months. This has resulted in a significant growth of negative equity on car notes.

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