Automotive Dealership Industry Tech and Trends

by automotiveMastermind

As we turn the corner on summer, the 2018 sales year is becoming quite a thrill ride for emerging car dealership industry trends. It seems the years of steadily increasing new car sales volumes are ending, but instead of a sharp decline, the market has become far more complex and demanding. Yes, sales were down in July. But not all vehicles suffered. Instead, July illustrated how the market is shifting based on three fundamental factors:

1.) July Sales Numbers Were Down – But Not by Much

What’s happening: It’s true that new vehicle sales lost ground in July, but that doesn’t necessarily mean consumers aren’t interested. They simply have more options and are strongly shifting their preferences toward SUVs and trucks. Case in point: According to Reuters, Ford’s passenger car sales dropped 28% – but the more profitable pickup business increased over 10%.

There’s also an accelerating used-car market. The Manheim Used Vehicle Value Index reported used car sales reached a 39.2 million SAAR in July – the best since 2012. That’s a trend worth watching, as some auto analysts think that used-car sales will go up if tariffs are enacted.

Why it matters: Car buyers are out there, but there are a wider range of options in their consideration set, making their purchase process more complex. Clearly, anticipating this change requires a more flexible and personal approach to each and every customer, across all aspects of the sale.

2.) New Technologies Are Good. But Some May Not Be Ready for Prime Time Yet

What’s happening: All the talk about autonomous vehicles is enough to make any dealer worry about the future of their business. But before you start thinking no one will ever drive a car again, consider this recent report published in Automotive News. Almost 50% of those surveyed said they would never buy a fully autonomous vehicle and 85% said drivers should always have the option to take the wheel.

Experts say it’s an example of how consumers now have a better idea of what autonomous technology really is – and why caution is required.

Why it matters: It’s not a surprise. Any innovation takes an on-going series of development, testing and refinement to provide a strong benefit. There’s little doubt “self-driving” vehicles will one day make up a sizable percentage of cars on the road. According to IHS Markit, by 2035, global sales of self-driving cars will reach 21 million. That will be up from nearly 600,000 units in 2025, a sales increase of nearly 76 million vehicles with some level of autonomy.

The automotive technology offers a compelling value in terms of safety and efficiency. In much of the same way, as consumer expectations around their dealership experience change, dealership managers are confronted with finding new ways to meet – and exceed – those demands. The technology that best meets those needs is always improving and developing.

3.) The Continuing Transformation of the Dealership

What’s happening: If July taught us anything, it’s that automotive retail is continuing to change – and at a faster pace. Indeed, every aspect is evolving toward a human-led and technology-driven experience. Consider how the current trend toward subscription “sales” would impact F&I. And, for that matter, the bottom line.

Why it matters: Most forecasts show that F&I remains a stable and strong source of profit for dealerships, even during the recent decline in sales. That means it’s a strong candidate to apply the fundamentals of what customers now expect at the showroom: a personal and transparent experience. Aligning sales and marketing with F&I is a good way to optimize the sales opportunity.

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