Many auto retail professionals were expecting the semiconductor chip and vehicle shortages to be long gone by now, but the industry is still grappling with supply chain challenges. Today on Inside Automotive, we find out how dealer Matt Bowers is navigating through these unique times. Matt is the owner of Matt Bowers Auto Group, which operates seven car dealerships representing five brands across the south. We’ll find out what Matt’s business looks like today and discuss the group’s latest acquisition of a Hyundai store in late 2021.
The average mileage on a vehicle in the group’s service departments has increased almost 55,000 miles from two years ago, says Bowers. And the average trade-in has more than 95,000 miles. You have to be adaptable to what’s in the market, he says. There are shoppers budgeting for lower price ranges. Whenever the supply and demand balance exists as it does today, it creates an affordability issue. However, the reality is that the cost of capital is increasing for both car dealers and consumers. But Bowers believes the business will remain profitable for a long time.
Car dealers realize that they can do far more with far less and Bowers thinks that a 30-day supply of inventory would be ideal. In fact, that is the day-supply Bowers likes to keep in used car inventory. The market conditions today have taken many inefficiencies out of the business, says Bowers.
In regards to Ford CEO Jim Farley’s statements about the future of selling EVs 100% online, Bowers thinks that it’s his job to be provocative and cutting-edge. But when it comes to the reality of EV adoption in the U.S., Bowers believes that the more realistic near-term solution is hybrid technology. Consumers will have the option to switch to gas or electric.
Electrification will take a generation, if not multiple generations to fully adopt says Bowers. In Jim Farley’s case, he has to project progressiveness and compliance as the leader of a public company.
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