Why Jim Ziegler is urging dealers to re-enter the used car market

When we last met with Jim Ziegler, the ‘Alpha Dawg,’ a veteran of the automotive retail industry and president of Ziegler SuperSystems, he shared his opinions and predictions regarding the agency model and Jim Farley’s controversial remarks. In order to find out if Jim’s outlook has altered in the new year and what he is currently projecting, we had the chance to catch up with him on today’s episode of Inside Automotive. 

The Used Car Market 

By the end of 2022, roughly two-thirds of dealers had already joined the Ford EVs program. Most of which, Zieglers’ earlier predictions came true. As an illustration, Carvana lost $2 billion, and 2022 fell short of 2021’s $20 billion. Ziegler asserts that there are now issues with quality in the industry. CFO John Lawler explained that it was due to supply chain mismanagement and subpar execution. 

On the other hand, Ziegler declares, “we’ve been in a recession, so this year it’s more about how deep we’ll get into it rather than when we are entering one.” To avoid becoming tied with the factory, Ziegler argued that dealers should return to the used car market. As Ziegler puts it, “if manufacturers are trying to eliminate dealers, then every one of the important corporate people will all have private used car lots.” For instance, it’s crucial to capitalize on the used car market while dealers still have floor plans and excellent credit.

Internet advancements 

Ziegler says that “disrupting the disruptors”—in this instance, digital retail—was made possible by the role of process. Although the majority of dealers claimed that some customers would make all of their transactions online, in reality, very few people actually do. Hence, even though they may start the process online, they don’t finish it there. 

Ziegler claims that “process rules.” Dealer processes must be user-friendly, quick, and focus on the best of the best. Which includes removing the negative performers from any dealer team. Ultimately, it is imperative that dealers streamline their operations, present qualified personnel to the public, track their sales, and have daily management meetings.

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