On the heels of a robust and profitable year for many in retail automotive, our attention now turns to what dealers should be focused on this year to remain profitable. We’re pleased to welcome Jim Ziegler, also known as the Alpha Dawg. He is also a retail automotive veteran, and President of Ziegler SuperSystems, to get his perspective on what’s to come this year.
One of the biggest challenges Ziegler believes the industry faced in 2020 and 2021, was transitioning into the next generation of online car buying. Digital retailing is here and it is getting very competitive. OEMs are starting to take direct orders and create national retailing portals. Ziegler believes that more OEMs will try to replicate the Tesla model. Additionally, platforms like Carvana and Vroom are growing rapidly, albeit with profitability concerns.
Despite these factors, a Ziegler SuperSytems survey found that 70% of car dealers think the standard dealer model will still be in existence 10 years from now. However, in another survey, 70% of consumers believe that the majority of car purchases will be done directly from the manufacturer.
Whatever platform you use for digital retailing, you have to marry it, says Ziegler. Make it a complete part of your dealership operations.
“You’re creating a culture and culture is born of process,” says Ziegler. “Average people with great processes can do incredible things.”
This is especially important when considering the challenges that lie ahead for dealers in 2022. Ziegler believes, like many, that the inventory shortage is not going away any time soon. One of the biggest things dealers will have to do is devise more ways to source vehicles from the public. Now is the time to change your advertising message from selling cars to buying cars. Ziegler recommends advertising for open positions as well, especially auto technicians.
From his perspective, Ziegler thinks that the focus needs to shift to leasing. OEMs need to create robust programs with good incentives for car dealers. Guarantee the future value of your vehicles. The more leasing dealers do right now, the more business they will have when the chip shortage ends.
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