Is the franchised dealer structure coming under attack? Today on Inside Automotive, we’re pleased to welcome AJ Hiers, President of Boniface Hiers Automotive Group to give us his take on the issue and other concerns he sees coming in the future. Boniface Hiers currently operates five dealerships that represent over half a dozen brands.
Hiers starts off by saying that he thinks the franchise dealer network is strong due to pent-up demand and he foresees even better results on the horizon. He explains that margins will probably be lower and car dealers will have to focus heavily on the various profit centers in their stores.
As the industry converts to an all-EV environment, car dealers are left in a state of uncertainty. Electric cars are coming to dealership lots at some point and there is no stopping it, says Hiers. He believes that dealers will be successful at selling electric cars.
“When General Motors, Ford, and Chrysler and the rest get into the electric car business, I think it’s going to dilute everyone else’s business,” explains Hiers. “Because they have dealers and they have the infrastructure it takes to sell and satisfy customers and repair cars when the rest of them really don’t.”
Car dealers are very resilient and can take advantage of their profit opportunities, but Hiers concedes that some of the service business will likely go away. However, car dealers have a lot of runway until that day comes. The elephant in the room, Hiers adds, is the issue of affordability surrounding electric cars.
Vehicle affordability is a massive issue overall, but Hiers says that cars are now lasting a lot longer. Consumers, in general, are keeping their cars for a lot longer as well.
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