Things have changed in the dealership over the last four years. Keeping up with these shifts is crucial, not only to determine how far the retail automotive sector has come but also to obtain a glimpse of where the car business is headed.
On this episode of Inside Automotive, host Jim Fitzpatrick meets with Adam Arens, president of Patriot Automotive Group. Arens and his team are some of the most respected dealership professionals in the industry, earning multiple best-store-to-work-for awards over the years. Now, shortly after celebrating the company’s 20th year in business, Arens joins the show to share his insights into the 2024 automotive landscape.
Key Takeaways
1. Arens notes that 2023 was overall a time of growth for his dealership group, with the company seeing exceptional service and parts performance. However, profit margins suffered due to rising new and used inventory levels, offsetting some of the company’s fixed-ops gains.
2. Patriot Automotive Group also tested new working conditions for its dealership employees, such as launching overnight shifts and offering flexible schedules. Arens notes these measures have not only helped his team members financially and mentally but also improved sales and performance across the company’s departments.
3. Heading into 2024, Arens expects the economy to perform well throughout the year, although he warns that challenges still remain for the automotive industry. Focusing on the good rather than the bad will be crucial for navigating the upcoming election cycle, ongoing international tension, and typical economic uncertainty.
4. Although Arens himself drives an electric vehicle, he notes that 2023 saw demand stagnate for battery-powered models as unaffordable prices, range anxiety, and infrastructure limitations began to suppress consumer interest. However, he notes that many buyers are turning to hybrids as a more convenient and cost-effective alternative and believes that dealerships will likely see low-emission car sales take off in the coming months.
5. Used vehicle inventory remains difficult to obtain. Arens notes his dealership group has turned to alternative acquisition routes to secure a steady supply of pre-owned cars. He urges dealers to remember that as used car prices rise, their availability will also increase, making it crucial to balance days’ supply with demand.
"What we've seen is, the more expensive the used car, the more readily they are available until you get into the exotics." — Adam Arens
