Trend 1: Stagnating Sales
According to NAAMSA, it is anticipated that new vehicle sales could improve by 3% annually, in volume terms, compared to 2017. However, domestic sales of new light commercial vehicles, bakkies and mini buses have experienced a sales decline of 2.3% in comparison to this time last year. In addition,a 14.6% decline in sales of medium commercial vehicles, and, in the case of heavy trucks and buses, a decline of 141 vehicles or a fall of 7.9% compared to the corresponding month last year.
Dealerships can fortify themselves against this torrential sales storm by becoming more flexible to the rapid rate of change the industry is and will continue to experience.
For this reason, dealerships are pressed to adapt to the following automotive industry trends if they are to benefit from these inevitable changes to secure their first-place position within the industry.
Trend 2: Ride Sharing
The likes of Uber seem to have seized the taxi market, potentially deeming the taxi industry obsolete in the next few years. Contrary to popular belief, this directly affects your dealership.
Although Uber is a direct competitor with taxi services, not with actual car owners, constant rising costs have caused many people to opt for ride sharing alternatives instead of owning their own vehicles, creating a knock-on effect for the auto industry.
Why not invest in Uber drivers as long-term customers, who require constant maintenance of their vehicles and may eventually upgrade their vehicle for higher-paying fares? Offering them incentives and lasting relationships means you don’t lose out on the market share they are currently capitalising on, you’re embracing a new one.
Trend 3: Electric Vehicles are Thriving
Electric vehicles are expected to take over the auto industry, as evidently seen with an increase in electric vehicle sales whilst automotive sales were in decline last year. Entire nations are increasingly set on eradicating fuel-burning vehicles, whereas, France and Britain plan to outlaw gas-powered vehicles entirely by 2040.
Many automakers, such as Mercedes-Benz, BMW, GM, Ford, Toyota and Volkswagen, are proactively devising or already implementing swift transitions to focusing their manufacturing efforts on electric vehicles.
Dealers should start gearing up to not only sell and service electric vehicles, but to begin marketing them as well as engaging in any other potential business initiatives associated with this inevitable progression.
Trend 4: Customer Prioritisation
A customer-centric dealership is more important now than ever before because Google, Amazon and social media platforms give customers the alternative to side-step a dealership when purchasing a vehicle. A study conducted by Autotrader revealed that customers remain disappointed by the services they receive from dealerships, with 72% insisting they would frequent dealerships more often if improvements in the purchasing process were made. This indicates that dealerships are overlooking an opportunity to shift their customers’ shopping experience, thereby losing out on a large market potential. Dealers therefore need to focus on improving their customer experience at every point of their business scope, from reception desks all the way to dealership websites.
By acknowledging and embracing these trends, your dealership will be primed to tackle the necessary changes required to benefit from these foreseeable developments, ensuring the profitability and longevity of your business.