– Perspectives of J. H. Thompson, Assistant Editor, Automotive Digest
- U.S. market will be over 15M due to pent up demand, an aging car park and the increased number of vehicle introductions.
- Improved housing market is driving consumer confidence.
- Lenders have learned consumers will pay their auto loan before their home mortgage or credit card balances; leading to relaxed lending rules for car buyers.
- Used car prices will remain above average; sale volume will remain strong despite low inventories.
- Used car sales will be buoyed by three-year old lease returns coming back to the market.
- Sales in Europe will continue to decline (bad news for Ford and, particularly, GM – my opinion).
- China and the emerging markets will see exploding sales growth. They do have issues: dealer network, national tax policies and local infrastructure.
- Lexus is back on top, but it will take time to regain sales leadership.
- Ford and GM are in good shape.
- Toyota has fully recovered for the tsunami. Honda is in good shape, but has a way to go mainly due to poorly launched Civic and customer experience.
- Chrysler has serious issues; questions remain about how successful they will be long term.
- Mitsubishi has serious issues; its viability is in doubt.
- Mercedes plans to challenge the market with a sub-$30K entry.
- “The customer experience” is the hot button issue.
- Most dealers used the recession wisely; controlling expenses and improving F&I, used car operations and parts & service to remain profitable.
- Dealers are expecting strong sales and profits in 2013.
- The increase is sales volume offers a dilemma: keep overhead low at the expense of sales or return to practices of the past to sell more cars.
- Franchise brand improvement programs went too far; strict adherence to a cookie cutter look cannot be justified.
- Dealers pushing back on Objective Based Sales Incentives; causes excessive consumer shopping.
- Social media will drive future sales success including efforts at reputation protection; dealers who do not hear this message will struggle.
- The number of dealers will not increase significantly.
- Dealers seem unconcerned about growth of organizations like AutoNation.
- Dealers face issues regarding taxes, employee health insurance, customer privacy, and increase scrutiny by Federal Trade Commission.
- The Cloud is the word; offers easy implementation, up to date computer applications, menu shopping for application and system security.
- Focus on customer experience to mirror focus of automakers.
- The customer experience often centers on the ability to communicate with customers with a concentration on the emerging buyers of Gen Y.
- Too many vendors offer the same services, look for consolidation; dealers want a single source for DMS, social media marketing and reputation protection. (Author’s opinion)
- Big Data is important, but only if you know how to analyze it and put actions in place to take advantage of the results.