It’s a big election year, which always tends to create some extra stress in the economy, but what are some of the other automotive industry trends we expect to see in 2016? QCEP Consulting, a firm specializing in business consulting for the automotive industry weighs in.
What do you think are some of the automotive industry trends we should be watching for?
I see manufacturers building models that don’t match their target market. They are adding technology and high end automation features, but this costs the consumer who doesn’t want to spend the money. This production, then is creating a mismatch in the marketplace and the consumers are not running to the lots.
Leasing will be become more attractive to push in 2016 and 2017, especially on the luxury brands like Lexus, BMW, and Mercedes. Expect a 20-30% growth in leasing in the next few years.
Additionally, ride sharing options are growing in popularity and Millennials aren’t quick to buy. Consumers today aren’t getting their drivers licenses right away and with car sharing being more affordable than owning a car, these will challenge and change the marketplace.
How do you think the elections will affect the automotive industry?
Election year fears keep people’s wallets close, so I expect to see auto dealers facing some challenges with moving inventory. When dealers hold the correct amount of inventory that is in balance with the demands of the customer, they will see better margins than those who don’t. Retail centers just need to understand that new cars likely won’t sell as quickly as used ones, and they should account for that in their budget planning.
How will it be remedied?
Dealers need to understand that only 20% of their product will be hot in the market and those shopper will pay any price to get them. However, the other 80% will require the dealer and manufacturer to create incentives to encourage sales. Dealers, in order to move inventory may find themselves making little to no profit per unit.
The dealers today need to find ways to create more effective systems. Gone are the days of one profit center making up for another. Each one must be efficient and creating positive cash flow, or they will fail. Retail centers need to be sure they are following the best practices for sales.
What do you consider those best practices to be?
First, the dealer needs to make sure their website is easy to use and has enough information to entice shoppers to come to the dealership. Second, when the consumers do come, they needed to be greeted immediately in a friendly, professional and inviting manner.
Third, the customer needs to be listened to. A knowledgeable sales staff will listen to the customer’s largest pains and know their inventory well enough to match them with the right product for them. Repeat the customer’s needs when showing the vehicle so they know they were heard- this builds rapport.
Anything else automotive retailers should know?
Professionalism is key. From their first impression, whether online or in person, to the signing of the contract and follow up, customers should feel respected and appreciated. Leaving a positive lasting impression will be a key to success.
For more information on automotive industry trends, frozen capital resolution and human capital management, contact QCEP Consulting. Their unique solutions for the automotive industry will correct inefficient processes and improve staff performance to create better profitability.