Drive to Success: Margin Compression Just One of Many Challenges for Dealers

While shrinking margins continue to plague dealers year over year, a new set of challenges is weighing heavily on the modern franchise dealership. With growing technology costs, privacy concerns, and changing buyer habits and demands, if your dealership isn’t feeling the pressure, you may simply be in denial. Here’s what the experts are saying about the challenges coming your way, and what you can do to combat the growing threat to your profitability.

1 – How US Dealers Can Survive the Coming Downturn in Auto Retail

Boston Consulting Group: Dealers face continued threats along their value chain, and margin compression is just one of many. With a looming economic downturn in the future, what can dealers do to prepare?

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2 – The Two Biggest Challenges Faced By Car Dealers In 2019

One Dealer: The car dealership of tomorrow can beat the challenges of today and remain successful. It will take strategic planning, smart technology, and the ability to pivot as customer expectations continue to change.

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3 – ‘We’re Full,’ Car Dealers Say as Auto Sales Slow After a Long Boom

The New York Times: A slow-down in vehicle sales threatens to weigh heavily on the US economy as near historic sales over the past ten years are drying up.

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4 – Getting a Grip on ‘Margin Compression’

Affinitiv: Technology may be changing the game for auto dealers, yet gross new vehicle profits have continued to drop in the last three years in a row. Improving your dealership’s processes can make a huge difference, so let’s define which processes—improving F&I, better transparency, omnichannel consistency—will work for you.

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5 – Add-On Services Drive Car Dealers’ Profits

MSN: Last year, 46% of new car buyers paid for the extended warranty. This signifies that dealers are getting more savvy when it comes to selling those upgrades and add-ons—and for good reason. Sellers are making around $420 on average on new car sales. That’s it!

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