Right now, the economy is smiling on the auto industry. Numbers are up from last year and future tax policies seem to favor car sales. However, mid-year predictions forecast that though we’ll continue to see some growth in the coming months, dealerships should be prepared for declines in sales.
Several factors drive these dire predictions, such as high insurance rates and high car prices. How should companies ready themselves for when the bubble bursts? According to experts, the strategy that will put some dealerships ahead of the pack when the market shifts is pivoting.
Pivoting is the ability to switch gears, sometimes making an entire 360 degree turnaround from previous policies. It takes resilience and flexibility to pivot. The human psyche is more comfortable with the familiar route. Being able to pivot your dealership requires forethought, foresight and the ability to take action, no matter how counterintuitive it might seem at the moment.
To start pivoting, gather your entire team for a future-oriented discussion. Open the floor to brainstorming, allowing employees to consider what changes to your current model need to be made in order to anticipate future trends. Ask them as well what they think those future trends are.
While discussing, take note of your most innovative and stubborn thinkers. You’ll want to eventually assemble a team that can come up with suggestions and a roadmap for the changes you’ll be making, and you’ll need those innovators on the team. The more stubborn thinkers should be kept separate from this form of decision-making, as they’ll have a hard time dealing with change and won’t have the capacity to be as flexible. So if an employee keeps insisting that “things are fine” and that you’re “overreacting” with this line of thought, chances are they’re not the one you want advising you on things that might need overhauling.
Once you have your team in place, have them focus on three key areas that will help guide their planning: Local, Federal/International and Technological changes.
When it comes to thinking locally, your team should look at what major changes your area is set to undergo in the next five, ten and twenty years. Are there signs of gentrification? In that case you might want to start thinking about bringing in more family and eco-friendly cars, as they’re going to be desirable to that demographic. Is there planned construction that could make it difficult for customers to easily get to your dealership? Start thinking about how you can meet the customer when they might not be able to meet you.
Looking toward federal and international changes, have your team investigate what might change in federal and international law that could impact your dealership. Will taxes and tariffs mess with car prices? Will there be changes to insurance laws? Will there be emissions bills instated that affect car production? Knowing these pieces of information can help you create strategies for acquiring and selling your merchandise.
Finally, look at technological advancements. Not just the ones that have already been made and put on the market, but have your team look towards research and innovation that predicts what’s to come. While automated cars might not be on demand now, are conditions being put in place that will make them soon the hottest thing in automotive? Even if you can’t practically prepare for all future technological innovations, have your employees become knowledgeable in the latest changes to the game. This way, not only will they be up-to-date when speaking with customers, they’ll be ahead of everyone else once different models and designs go to market.
While it might seem like a time to relax and rest on one’s laurels, don’t let the current industry highs lull you into a false sense of security. Now is the time to invest in the future, and pivoting your strategy through smart planning is the way to cover all your bases.