The Biggest Challenges Dealerships Face in 2021

The Biggest Challenges Dealerships Face in 2021

Whether you’re a salesperson, sales manager or general manager, working at a dealership has many challenges. These challenges come in the form of competing local dealerships, a reputation of haggling, the ability to bring in new customers and of course the most current challenge; operating during a global pandemic. The repercussions of Covid-19 have been significant, to say the least. Not only has this pandemic affected the economy at a massive scale, but also the chip shortage has many dealerships worldwide waiting for inventory to sell! 

We know how overwhelming changes like this can be to dealerships, but it’s important to remember that as the industry continues to evolve, your dealership needs to evolve with it. In this article, we’re going to talk about the three most common challenges dealerships face and how to address them head-on. Since we’ve talked so much about the effects of the chip shortages in other blogs, we’re going to leave it off of our list, despite it being a major challenge. 

1. The Economy

Covid-19 affected the economy in a major way, many people lost their jobs and were forced to go on government subsidy programs. This ultimately led to lower auto sales across the country, making it harder for you to sell cars. There’s no way for you to control the economy, like interest rates and gas prices, these things will fluctuate out of your control.  There are, however, things you can do to keep your dealership thriving during a poor economic period. While we’ve seen many dealerships “throw in the towel” and discontinue or reduce their marketing and social efforts during Covid, it’s important you do the opposite. Now is the time to stand out from other dealerships, you can do this by continuing to be active on social media and really emphasizing your customer service practices. You need to offer your customers great service and make all of their interactions with your dealership convenient and easy. 

2. Customers Changing Expectations 

The way customers have their first interaction with a dealership, all the way to a sale does not look the same as it did even 10 years ago. This is because just as the automotive industry is constantly changing, so are your customer’s expectations of how the car buying process should be. So what are the three main things changing the way your customers look at the car buying process? 

  • Customers are making quicker decisions. The time a customer has decided to buy a car to actually signing on the dotted line has reduced significantly. According to a report by Bain and Company, it takes approximately 9 weeks for this process, meaning the dealership needs to increase the speed of their process as well. 
  • Customers expect online purchasing experiences. Today customers expect some form of an online purchasing experience. As a dealer, you need to ensure you have these online resources for the customers who want them. 
  • Customers want a digital retailing step. According to a study done by Cox Automotive, 85% of customers are more likely to buy a car from a dealership that offers a digital retail step. If you want to take advantage of this, you need to ensure you have a digital retailing step as part of your dealership!

3. Ride-Sharing Apps (Uber & Lyft)

The last challenge dealerships are facing today is the growing industry of ride-sharing apps. Every year, the ride-sharing industry is growing and this is both affecting the taxi industry and the automotive industry. The growth of this industry is showing no signs of slowing down and it’s estimated it will be a $285 billion industry by 2030. While technology is always going to create changes in our industry, there is also plenty of opportunity for growth. There’s nothing we can do to stop the growth of ride-sharing apps, but we do know that consumers are always going to need vehicles. Innovation in technology can help you better align with how your customers buy a car. This will ultimately lead to more satisfied and engaged customers. 

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