3 Challenges Dealers Face in 2018

Learn why data ownership and security, the economy, and reputation management are hot topics for U.S. auto dealers this year.

February 2018, Auto Dealer Today - Feature

by Bill Wittenmyer

President Donald Trump’s first year in office was marked by soaring stock prices and a series of international incidents, leading to uncertain economic prospects in 2018. Photo by Gage Skidmore via Flickr
President Donald Trump’s first year in office was marked by soaring stock prices and a series of international incidents, leading to uncertain economic prospects in 2018. Photo by Gage Skidmore via Flickr

Are you excited for 2018? I know I am. I expect this to be a good year for the auto industry. One of the things I like about this industry is that it’s always evolving. Technology continues to be a disruptor, and it’s changing the way we buy and sell cars. Dealers who embrace these changes are in the best position to compete.

The latest estimates project new-vehicle sales of up to 16.7 million. That’s down a bit from 2017 but nothing to worry about. We’re holding steady. But we can’t expect the next 12 months to be all wine and roses. Doing business as usual will not yield your desired results. We all must prepare for the challenges ahead.

1. Big Data

Big questions loom over the business of big data. Who owns it? Where is it? What do you do with it? As we ponder the answers, the most pragmatic approach is to focus on what you as a dealer can currently control.

Where does your data reside? There’s the data in your DMS, CRM, phones and other third-party systems. Lack of integration, among other issues, makes it likely they can’t all talk to each other.

For dealers, this should be a primary focus in 2018. It’s difficult to use big data to your advantage without having 100% of it available. When all of your data is in sync, you have a better view of what’s happening and better reporting so you can make better decisions.

Two areas that I think big data will benefit dealers the most — and should therefore be the highest priority — are inventory management and marketing spend.

Don’t let your OEM dictate what your inventory flow should be. Use big data to determine what is selling and when. You might sell 20 midsize SUVs in January and February but only two in July. Are you stocking what customers in your area are looking for? Do you know which of your recent incentives increased sales, and by how much? Big data can give you the answer.

When it comes to marketing spend, the biggest benefit you’ll get from big data is attribution. This goes beyond impressions and click-through rates. If a vehicle isn’t selling, sometimes your first instinct is to slash the price. That’s not always necessary. Maybe you’re just not advertising that vehicle in the right place at the right time. Big data provides granular insights into where you should be spending your money to get the biggest returns.

Pressure to deliver the “Amazon experience” could lead more dealers to adopt online retailing tools in 2018. Photo by Simone Brunozzi via Flickr
Pressure to deliver the “Amazon experience” could lead more dealers to adopt online retailing tools in 2018. Photo by Simone Brunozzi via Flickr

2. The Economy

You’re probably wondering why I think the economy may present a challenge. Things are good, right? Why worry? Well, in our industry, we tend to be very reactionary. Good times are the best times to prepare for bad times.

We have enjoyed a relatively stable economy and business climate for years. But when you look beyond our borders, things are kind of scary out there.

The current political climate presents many uncertainties. America is not very well liked in other parts of the world. Exiting or renegotiating the North American Free Trade Agreement could have an impact on the auto industry. Then there’s the threat of a major terrorist attack. North Korea, anyone? How about Europe? Brexit, the Catalonia secession, a potential real estate bubble and that pesky debt crisis that has not gone away and still threatens EU stability.

I should make clear that I am not a pessimist; in fact, I am quite the opposite. Chances are that everything will be fine. But a domino can fall at any time, so it’s helpful to be prepared.

From inventory management to staffing, it may be wise to not overspend while times are good. What’s your Plan B if the economy suffers a major hiccup in 2018? Every auto dealer should have one.

3. Your Reputation

As an industry, I do believe we’re getting better at this, but we’ve still got a long way to go. In a recent survey conducted by Roadster, millennials named “car dealer” as one of the top three professions they would like to avoid, right along with “tax collector” and “politician.” And we’ve all heard about the survey that says women would rather go to the dentist than visit a dealership’s service department.

I believe that improving the customer experience should be the top focus for every auto dealer in 2018. It’s time to let go of the old ways of control and withholding information from the customer. Trust me, I know how hard it is to change this mindset. Back in the day, I believed all those tactics were necessary. Today, I’m certain they are detrimental to the future health of your dealership.

Customers just aren’t taking it anymore. They are flocking to any alternative. Take CarMax, for instance. They don’t offer the lowest prices, but customers love the no-haggle experience.

I also believe that part of the problem with the auto industry is that we’ve become very transactional in nature. Buying a car is a big deal to most people. It’s an emotional decision. It should be fun!

When was the last time you heard someone say, “I need to buy a car. I’m so excited to start shopping!” No chance. People dread the experience. They want to be excited, but when they call their local dealer, even for the most basic information, it’s like pulling teeth.

Car buying should be fast and friendly. I guarantee whoever figures out how to make the shopping experience as easy and fun as it is to shop on Amazon will never have to worry about competition again. The question is, who will that be — you or Amazon?

I have high hopes that 2018 will be a great year, but it won’t be without challenges. If you are willing to face and embrace these challenges, you will gain the knowledge, skills and reputation you need to be prepared for whatever comes your way. 

Bill Wittenmyer is a partner with ELEAD1ONE and a 20-year automotive industry veteran with expertise in sales, marketing, OEM relationships and large-client accounts. Email him at

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