The New Year seems to be off to a good start, especially for automotive dealers. While 1990s brought the industry high oil prices, and 2008 brought the financial crisis and the federal bailout of the big 3 American automakers, the landscape has since shifted in a more promising direction.
In fact, over the last year, automotive sales rose 11%, and it’s expected that this growth will continue over the next few years.
However, as technology, demand, and consumer taste change, automotive dealers across the country will need to adapt in order to capitalize on the coming trends in 2016. Below are a number of ways the market is changing, as well as some tips on how your dealership can take advantage of what’s to come this year.
Consumers Want More
First and most important, today’s consumers want more and more from every company they do business with—including automotive dealers. The vast amount of information available on the Internet has created more educated consumers. These consumers now expect more transparency into pricing, products, and services, and expect more personalized, genuine, and timely customer service. Customers don’t want to be “sold to” any more.
By having an updated website with your current inventory and an active social media presence, you can communicate with customers directly where they get their information. Additionally, by improving the efficiency of your sales and service departments, you can achieve greater customer satisfaction, which can translate into recurring customers and customer recommendations.
Often times, filing, managing, and searching for paper documents, like service records, parts invoices, and other customer information, can be very time consuming, and ultimately drag out customer wait times longer than they should be.
However, by adopting new technology, such as content management tools, managing these documents becomes a much more streamlined, efficient process. Storing your documents in a single, web-based storehouse, rather than file cabinet after file cabinet, enables your staff to easily search for the documents they need quickly, which enables timely customer service.
Consumers Demand Energy Efficiency
Additionally, as oil prices remain high, and as there is more concern for protecting the environment, consumers are increasingly demanding energy efficiency when it comes to the cars they drive. While the big 3 automakers are doing their part by introducing more hybrid, electric, and high mileage vehicles, dealerships must also do their part by stocking this inventory in the coming year. The increase in sales of these eco-friendly vehicles will also create a market around servicing these vehicles, so it’s also wise to stock parts for these vehicles.
Consumers Are Holding Their Cars Longer
Even though automotive sales increased 11% last year, most consumers are still holding onto their cars longer, as many budgets are still tight coming out of the recent recession. According to research from R.L. Polk & Co., the average consumer holds their car for 63.9 months, 4.5 months longer than in 2014. So while many consumers aren’t in the market for a new car, they might be in the market for services. In order to compete with oil change outlets, tire stores, and independent service centers, its important that your service department is running efficiently. The streamlined management of documents that content management tools enable can help with this.
Opportunities & Competition Will Grow
Lastly, all three of the trends listed above mean that the opportunities your dealership will have to take advantage of and capitalize on will grow throughout the year. More consumers will want environmentally friendly cars and more will need services and parts for those cars and the cars their holding on to. All this spells the opportunity for increased profitability. Of course, this also means that competition will grow, as other dealers have the same opportunities as you. That just means that you need to differentiate your dealership, by providing consumers with what they want: a timely, efficient, personalized customer experience.