What does the future have in store for automotive retail? Brandon Goodermont weighs in.

Car dealers have been challenged with navigating the uncertainty in today’s market, but some believe better days are on the horizon. Today on Inside Automotive, we’re joined by Brandon Goodermont, General Manager of Jeep Chrysler Dodge RAM FIAT of Ontario, California. In this segment, Goodermont shares his future outlook and predictions for the industry.

Business is good, according to Goodermont. New vehicle inventory is steadily returning to dealerships. However, a combination of interest rates, inflation, and fuel friendliness is causing a perfect storm that is starting to slow down the industry.

As the pandemic continues to affect the economy, many people are wondering if the 0% rate incentive applies to ordered vehicles. The answer is yes, as long as the order comes in at the same time as the 0% is in effect. With vehicles being a couple of months out, it is beneficial for dealers to reappraise the vehicle once it arrives. This allows the dealers to see where they are in the pricing bubble and adjust as necessary. Most dealerships have also shifted their marketing due to the pandemic, but as inventory increases, they will need to expand their marketing to stand out.

If you’ve been talking to newer salespeople about the current state of the market, you’re probably aware that things are far from ordinary. With the economy in flux due to the pandemic, many people are reconsidering their spending habits, including those in the automotive industry. As we emerge from this challenging period, it’s crucial to have honest conversations with newer salespeople about what they can expect in the future. While the market may have been good for the automotive industry in the past, that may not be the case in the future. Setting realistic expectations is important, so everyone is on the same page.

As more and more manufacturers look to work directly with customers, some in the industry are concerned about what that will mean for them. “We are seeing these manufacturers, especially with developing EVs, looking to work directly with the customers, but we aren’t really sure how that will affect us,” said Goodermont. Concerning EVs, Goodermont voiced that there are still many unknowns about the infrastructure and future disposal of batteries. This is something that dealers will need to keep an eye on as it could significantly impact the power grid and blackouts as well as future legislation.

The used car market is experiencing a value softening, closing the gap between new car prices and used car values. This will require dealerships to adjust how cars are acquired and appraised. Regarding current pricing, Goodermont stated, “When it comes to pricing our vehicles, we want to be competitive but not undercut the market by an extraordinary amount. We still have vehicles that we sell for market value and some that are at MSRP.”

The auto industry is ever-changing, and navigating it can be difficult for businesses. Goodermont’s dealership takes a conservative approach to the industry to succeed. This means being cautious and not moving or reacting too quickly.

Although no crystal ball can predict the industry’s future, businesses can stay afloat by being aware of the market and making adjustments as needed. The biggest challenge facing auto groups right now is the need for technicians. With the service department backed up, businesses need to have a steady volume of inventory. Goodermont thinks if companies can maintain 45 days’ worth of inventory, they should be in good shape.