Dealers are anxious to know what challenges await the automotive industry in 2023, which is why they are paying close attention to experienced perspectives. Lawrence Vaughn is the Dealer Principal for Wise Chrysler Dodge Jeep Ram in Ohio and has years of success in the car business. As a Black man, he also brings intimate knowledge of the challenges minority professionals face in their auto career paths. On this episode of Inside Automotive, Vaughn joins host Jim Fitzpatrick to discuss current market issues and how the industry is seeking to challenge its diversity problems.
Pricing
Vaughn notes that competitive pricing has, for better or worse, returned. As inventory levels return to normalcy, dealers will increasingly offer incentives to keep profit margins high in the face of more supply. While lower prices do make the sales environment more difficult, they also indicate a healthier, more sustainable market. Affordability is an increasingly worrisome issue that, if ignored, could slow consumer demand just as production output picks up speed. Dealers should be prepared to accommodate strained consumer finances throughout 2023 to avoid stifling demand.
Training
However, while price corrections may be inevitable, it will still be an uphill battle for sales staff. After all, lower prices result in lower commissions. Sales professionals have enjoyed the luxury of a high-demand, low-supply economy for the last three years, and a return to normalcy may not only be frustrating, but it can also be an entirely new experience for employees who joined after the COVID pandemic. Vaughn is tackling the issue with specialized training, ensuring his team members are equipped with the negotiation skills they need to succeed in a high-pressure environment.
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More: Electrification
One of the biggest questions dealers ask in relation to the emerging electric vehicle market is where they fit in. Interest in EVs varies wildly between geographic locations, and a one size fits all solution is unlikely to be discovered. Infrastructure is also inconsistent, leaving many states without enough charging stations to support electrification. This is why store owners will need to closely monitor their local economy, to ensure they build their EV inventory in pace with demand.
Diversity
Although many industries struggle with diversity, automotive retail, and manufacturing are especially challenged. Even a cursory examination of dealer groups or OEM leadership will reveal a troubling lack of minority professionals. Unfortunately, addressing the issue is no easy task, since individual paths to management or store ownership are never identical. “It’s kinda uncharted territory,” explains Vaughn. This is why automakers are increasingly supporting diverse candidates when opening new franchisees: doing so allows qualified talent to circumvent racial or gender-based stereotyping, which remains rife in American business. Organizations such as the National Association of Minority Automobile Dealers also provide invaluable training and networking opportunities that give minority businesspeople an edge over the competition. Vaughn attributes much of his personal success to the support he received from individuals who recognized the importance of giving marginalized groups a voice in the car business.
While the auto industry is no stranger to problem-solving, many of the current issues facing dealers are either new, such as electrification, or ones they have only recently become aware of, such as diversity. Innovative solutions will be needed to tackle these challenges, which is why store owners should pay close attention to the perspectives of successful businesspeople such as Vaughn.
