Innovation and adaptation are crucial for car dealers to navigate today’s auto market. But every time retailers acclimate to their industry’s evolution, something new comes along to shake their confidence, whether that be digital retail, limited inventory, new technology or record-high prices.
On this episode of Inside Automotive, hosts Shyann Malone and Jim Fitzpatrick sit down with Andy Wright, the managing partner of Vinart Dealerships. Wright has been at the forefront of adopting new tools and strategies in the car business and has witnessed firsthand how adaptability can make or break a dealership’s long-term success. Now, he joins the show to discuss the challenges he sees facing car dealers in the coming months.
Key Takeaways
1. Vehicle pricing remains an obstinate challenge to both dealers and consumers, but Wright believes the market pendulum will swing back toward cheaper deals in the near future.
2. The electric vehicle market is largely comprised of early adopters who have traditionally favored Tesla over other brands, meaning that OEMs will need to attract consumers from other demographics to sell their products.
3. Momentum will need to increase in the EV market soon, whether by solving customer pain points such as charging infrastructure and range anxiety, or by addressing the high prices of battery-powered cars; otherwise, car dealers will face overcrowded inventories of vehicles they are unable to maintain.
4. Car dealers should expect challenges in the coming months since the economic headwinds resulting from the COVID pandemic have yet to dissipate. The United Auto Workers union strike could heavily disrupt new vehicle production and result in the return of shortages. This could also cause prices to skyrocket even higher than they are now, suppressing sales even more.
5. It is not clear how those challenges will manifest themselves, but car dealers can still expect to see a strong post-pandemic market in the coming months.
"As [electric vehicles] get built and they get to dealer lots, we have to see these things start to move at much quicker rates because dealers are going to be struggling here in a real big-time way with the carrying costs associated with having these EVs in inventory at floor plan rates of 6-7.5%." — Andy Wright
