Andy Wright, an auto retail expert, is the Managing Partner of Vinart Dealerships and the Hyundai Dealer Council Vice President. Wright has business insights that few others possess and a wealth of knowledge to share with dealer veterans and rookies. Inside Automotive‘s Jim Fitzpatrick sits down with Wright to discuss the current status of retail automotive and his end-of-the-year predictions for the market.
Following a difficult period of low prices and meager sales during the COVID pandemic, dealerships began to see higher-than-usual demand as consumers rushed back into the market. At Vinart, Wright witnessed improved employee retention and engagement, likely due to better commissions after the surge. However, the market is starting to return to pre-pandemic levels, which new auto retail workers will likely find disappointing. Wright hopes that “…those that have enjoyed the good times will remember them as things start to normalize.” However, he remains confident that a bright future remains and is happy to see staff showing optimism for their positions, even as he prepares his own for another market shift.
Supply chain issues have continued throughout 2022. While production has improved since COVID, model availability has remained sporadic, leaving dealerships with imbalanced inventories. Acura and Honda have been impacted the most by semiconductor shortages as they strive to compete with established EV producers, Wright notes. Hyundai has performed better than other brands but continues to be plagued by production issues. Mercedes-Benz availability has been imbalanced across the U.S. Porsche supplies are scarce, but, as Wright jokes, “we never had enough [of their] cars before COVID, and we never will.” Above all, auto retail suppliers have found it challenging to keep high-demand vehicles in stock, an issue Wright believes may get worse as new models such as Hyundai’s Ioniq 5 EV enter inventories.
Wright believes automakers will seek to resolve these issues by changing their production strategy. Since inventory is high at most dealerships, several automakers have signaled they intend to slow down production to save costs. While Wright disagrees, believing they should incentivize sales to increase their profit margins, the specific course business administrations will take, remains uncertain. Regardless, he warns the auto-retail community they will need to contemplate the potential ramifications and how they should prepare themselves and their employees.
Complicating the future of auto retail is a looming affordability crisis. Low supplies of new vehicles will drive prices up, which, combined with sustained high-interest rates, will hurt already desperate consumers. “We’re going to have to address the affordability issue sooner rather than later,” argues Wright. To do so, he believes that the entire industry, auto retail, and manufacturers, will need to develop solutions as a team. Returning to normalcy is inevitable, but the struggle is not.
Every year has been different from the last in the new decade, and the next will be no different. Dealers can expect the industry to continue evolving throughout 2023. It remains vital for auto retail workers to stay up to date by tracking industry news and listening to experts.
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