Vehicle inventories have grown over the last year as supply chains around the world have improved but at the expense of dealership profits. After all, the more vehicles there are in the market, the more values depreciate. Although retailers have scored record earnings since the onset of the COVID pandemic with little issue, they must begin searching for other solutions if they hope to sustain this success.
On this episode of Driving Solutions, host Jim Fitzpatrick is joined by Aaron Bickart, executive vice president and general manager of OfferLogix. Bickart is intimately familiar with the process of using data to improve a business’s logistics and operational efficiency. While at OfferLogix, he has spearheaded the development of critical tools and products for the automotive sector. Now, he discusses the latest headwinds affecting dealership profits and the new solutions driving retail success.
1. High interest rates are impacting dealership profits across the country. This has led some retailers to change the way they finance their vehicles so as to retain their customers.
2. Electric vehicle charging may become more lucrative than EV manufacturing, which is why many automakers are investing in charging infrastructure.
3. Leasing is becoming a better option for consumers, especially when the leased vehicle is on the cheaper side. Managers can use this fact to drive dealership profits in the mass market segment.
4. Retailers should pressure their channel partners to collaborate on solutions that will benefit the customer base and improve dealership profits rather than competing for market share.
5. OfferLogix is currently in talks with several companies to acquire their operations and improve their product offerings. Announcements are expected in the coming months.
"What happens is [the channel partners] are not all talking to each other. I think the big thing is, is if they can all figure out a way to get along, and help out the consumer and the customer experience, ultimately the dealer will win at the end of the day as well as the OEM." — Aaron Bickart