5 Challenges Auto Dealerships Face (and How Better Management Can Help) - PDF document

5 Challenges Auto Dealerships Face (and How Better Management Can Help) Automobile dealerships require a great deal of organization provided by highly experienced and knowledgeable managers to avoid the challenges that are inherent to the industry . Below, you can learn more about the five biggest challenges automobile dealerships face and how better management can ease the burdens they cause. #1 – Fewer New Vehicle S ales The global pandemic has led to a significant decline in the number of new vehicles being sold across the country. The lack of computer chips required for automobiles’ electronic parts is one of the main issues, but another is the impact that the pande mic has had to incomes nationwide. Furthermore, a lack of financial security caused by business closures and self - quarantine restrictions are leading people to buy used cars, instead. Good managers can come up with ways to help reward customers for buying new cars, such as an in - house warranty or free regular maintenance such as oil changes or tire rotation. #2 – Better - Quality Automobiles The service department is very profitable for most automobile dealerships, and while better - quality automobiles are alw ays wonderful, they require less maintenance over their lifetimes. This means that the more quality automobiles a dealership sells, the less profit they stand to make. Sending customers reminders for regular maintenance appointments, including things like new tire purchase and installation, air filter replacement, and others can help improve traffic (and thereby profit) in the service department. An experienced manager is proficient with these strategies. #3 – Stiff Competition The decline in new car sales is difficult enough without more dealerships cropping up in virtually every city across the nation, but that’s exactly what continues to happen. Dealership managers must be creative by coming up with marketing campaigns and extending the number and type o f services they offer if they want to continue to be profitable. Ultimately, this means improving service departments – the number one steady source of income for automobile dealerships. #4 – Too Little Transparency with Buyers and Consumers Over the last several years, consumer attitudes have shifted from buying a product based on quality and price to buying based on the reputation of the company. This means a dealership manager must be highly transparent and provide an amazing, convenient experience for every consumer who comes through the doors. Managers will do well to come up with new and more convenient ways to update customers about the status of their vehicles; an app that allows them to view changes and updates in real (or near - real) time offers ex actly what modern consumers want. #5 – Lack of Business Growth Strategy Finally, if an automobile dealership is going to succeed, it’s important to improve the dealership’s revenue and reputation in the community. The best managers come up with both short - term and long - term business growth strategies designed to provide a framework for organizational improvement despite the challenges. In other words, managers must create a plan for over coming these challenges and improving their businesses at the same time. With the right experience and knowledge, the right manager can truly make a difference. The right management is imperative to the success of any auto dealership. Ensuring that each d epartment is being led by a qualified, experienced, and creative individual is the key to growth and profit. You can use your own recruiting strategies, but it’s also possible to hire a recruiting agency spec ific to the auto dealership industry to provide you with experienced, vetted candidates for a wide range of available positions.