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Many changes ahead for auto dealers in '09 - January 03, 2009
Dealers must adapt to fuel-efficient vehicles, increased Internet use and Big 3 restructuring
It's the start of a new year and for the automobile industry, it promises to be another year of momentous change.
After consulting my crystal ball, I'd like to share some thoughts about where I think the retail car industry is headed over the next 12 months.
When gas prices reached more than $4 per gallon in the U.S. last year, it triggered a massive consumer exodus
away from gas-guzzling SUVs and pickups towards smaller, fuel-efficient vehicles.
Despite the recent drop in gas prices at the pumps, this trend towards more fuel-efficient vehicles will continue.
The Canadian government will put some type of financial incentives in place to encourage automakers to produce more green or alternative technologies. Look for more plug-in hybrids and electric vehicles, as battery technology improves.
Economists at Goldman Sachs recently reported that an economic recovery in Canada won't occur until the second half of 2009.
With a weaker economy, all new-car dealerships will have to work harder and smarter to satisfy customers who are more demanding and discriminating.
Dealerships that do a good job satisfying their customers are more apt to weather an economic downturn over the next year.
The restructuring efforts of the Big Three automakers will continue. They are fighting for their survival, but I'm confident they will emerge stronger and more competitive than ever.
Record-low interest rates in Canada will remain low throughout 2009. This is good news for consumers who are looking to finance a new vehicle.
Whatever type of vehicle you're looking for, 2009 will be a buyer's market.
The Internet will continue to be a valuable resource for consumers. Eight out of 10 car buyers conduct some form of research online before deciding what and where to buy.
Auto manufacturers, auto dealerships and consumer groups will all continue to strengthen their online presence.
Dealerships in particular will make better use of the power of the Internet to connect with customers.
A few progressive dealerships have already established dedicated IT sales departments that are responsible for monitoring online sales leads.
I expect many other dealerships will follow suit in 2009.
Dealerships will learn to become more resourceful and innovative in connecting with customers.
I recently heard an enterprising salesperson took it upon himself to make cold calls at local businesses. I don't know if this approach worked, but there's no reason why it wouldn't.
Dealerships will become more adept at adopting new methods of communicating with customers, suppliers and partners.
Social networking sites, mobile messaging (text, email, cell phone) and electronic newsletters are some of the new technologies dealerships will use to sharpen their communications.
Consolidation will continue to affect new-car dealerships across Canada.
Independently owned, single-store dealerships are becoming fewer and fewer, as dealer groups add stores to their portfolios.
Consolidation allows for a pooling of resources and economies of scale, which are especially important during a weakening economy.
Anyone considering a career in the retail car sector shouldn't be discouraged by the current economic climate.
I predict our industry will continue to attract talented men and women who want a rewarding career in an exciting industry.
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