For the third year in a row, the automotive industry is projected to see a modest decline–about 1.3%–in new vehicle retail sales. Many sources cite complications from rising interest rates and stretched consumer incomes as the top reasons for their less-than-positive expectations.
Factors Holding Back Business
The top negative factors holding back the business are current market conditions, credit availability to consumers and limited inventory.
Recently dealers have been less challenged by regulations, consumer transparency in pricing and too much retail inventory. Now, interest rates and limited inventory are now impacting far more dealers than this time last year.
Lack of Used-Vehicle Inventory Remains a Top Concern
While dealers reporting limited inventory as a factor holding back their business fell to the third most negative factor because other issues surpassed lack of inventory as a problem, but it still remains a substantial challenge.
Specifically, dealers are struggling to maintain inventory on attractive vehicle segments, such as SUVs and trucks that are priced within the means of consumers restricted by the impact of rising interest rates on monthly loan payments.
So how can your dealership get ahead and stay ahead in 2019 and beyond?
The decline is expected to be 1.3% overall. But let’s put that into perspective. That decrease amounts to about 1-2 units on average per dealer a month in sales across the country. Some larger dealerships may see a slightly larger per sale decline, and some smaller ones may do better.
Here are some ways your dealership can stay ahead…
1. Create a Digital Ecosystem
The main complaint consumers have is that it takes too long to purchase a vehicle. While the majority of vehicle purchases still happen at the dealership, most buyers want to start the process online in order to speed up the process.
The dealership of the future will be a customer-centric, data-enabled business using technology to provide personalized services to customers. Dealers are no longer just selling vehicles; they’re selling a digital ecosystem, a seamless buying process that takes the customer through their entire journey online to offline.
2. Retain and Attract the Right Customers
Generation Z is the next big opportunity for the automotive industry. This generation is open-minded, optimistic and eager to explore their options. They seek genuine content and place a high value on positive customer experiences. And the best place to reach them? A multiscreen campaign anchored on TV.
3. Look at the Facts, Not the Hype
TV remains the most-watched, most-engaging, most-effective media platform available. That being said – most TV watchers are now streaming and exposure to advertising is limited. The majority of auto buyers are prompted to look for more information online from a manufacturers claim or clever ad. Picture those giant red bows on the latest Lexus lineup that make the buyer want to look up a model online. When you add in advanced multiscreen solutions, you’re arming your business with a marketing mix that’s hard to beat.
Reach out to The ACE Group for more ways to equip your dealership with efficient and effective tools to get ahead in the automotive industry.