Hot or Hype? 5 Dealer Trends to Track

Facilities expert separates myth from reality on the subjects of autonomous and electric vehicles, offsite flex parking, the skilled labor shortage, and online-to-instore retail.

February 2018, Auto Dealer Today - WebXclusive

by Brent Tally

Driverless vehicles fascinate the media but don’t portend a significant change to the design or construction of front-end facilities. Photo courtesy TallyCM
Driverless vehicles fascinate the media but don’t portend a significant change to the design or construction of front-end facilities. Photo courtesy TallyCM

As I reflect on the opportunities of the new year, I am very optimistic about the overall state of the automotive and construction industries. Since our work as an owner’s rep firm puts us at the crossroads of those fields, I wanted to share our insights on some of the trends and new operating dynamics you will see in 2018 and beyond. 

1. The Media Will Overhype Autonomous Vehicles and ‘Slowing’ Car Sales.

Let’s start by busting a myth. Regardless of how you feel about the media, you can count on emerging automotive technologies to inspire bold claims among pundits. With that excitement comes sensationalism, especially on slow news days. 

Here is one thing to count on in 2018: The media will not be short on coverage regarding driverless vehicles. It is an exciting story that will one day come true. The real question is when. My prediction is that autonomous vehicles will not impact your day-to-day operations or sales for at least 10 to 15 years. They certainly should not affect your facility design plans for the near future.

Even if 2018 or 2019 turns out to be the year of the driverless car, the footprint of the typical modern dealership will be able to handle it. If immediate improvements are necessary, they will happen in your service department.

The author believes sales of electric vehicles such as the new Honda Clarity will soon become a priority for new-car dealers. Photo courtesy American Honda Motor Co.
The author believes sales of electric vehicles such as the new Honda Clarity will soon become a priority for new-car dealers. Photo courtesy American Honda Motor Co.

2. Your Electric Footprint Will Expand.

The latest versions of the Nissan Leaf, Tesla Model 3, Chevrolet Bolt, Honda Clarity, Volkswagen e-Golf, and many others are going to be popular mainstream EVs. Every large manufacturer has electric cars already in their lineup or coming soon, and it will become a priority for every dealership.

Training every dealership employee on EV technology and how to communicate to the customer how your dealership has the infrastructure and training to support their needs will be a critical part of your EV selling strategy.

In the future, dealerships will become a hub for all EV activity. You can gain a foothold by incorporating fast-charging stations at your store to encourage electric-car buyers to visit more frequently, providing them with a knowledgeable service staff, and creating flexible loaner programs for times when customers need longer-range, gasoline-powered vehicles.

3. You Will Need Offsite Flex Parking.

The demand for new-vehicle sales may taper off, but the supply of quality certified pre-owned units will remain strong. The operating reality of having too much supply is upon us. The most profitable and efficient dealers we work with are always on the lookout to bolster their parking and general operations space.

If you anticipate the need for additional acreage, and you see a barren parcel of land within a mile or three of your dealership, don’t hesitate. In time, as with all good pieces of land, it will be purchased.

4. You Will Face a Shortage of Skilled Tradesmen.

Although U.S. commercial construction firms are generally optimistic about the economy, they agree that finding skilled labor still poses a challenge. According to a recent survey by USG and the U.S. Chamber of Commerce, nearly two-thirds (65%) of recipients said skilled labor was one of their major concerns.

Take the current labor situation into account when setting your key project dates and timelines. Ask prospective contractors for multiple recent references and for their sub to full-time equivalent (FTE) associate ratio is. This will help you better understand how vulnerable your contractor is to the labor shortage.

5. You Will Need a Selling Strategy That Begins Online and Ends in the Showroom.

Many brands are creating new selling strategies that guarantee convenience and efficiency for the buyer. This evolution is a positive for your customers and our industry. 

The strongest dealers will embrace online retailing. You will find new ways to end the transaction at your store by making the handoff even more special. Set up a high-profile “delivery area” and offer valet or at-home delivery with digital welcome kits. This will set the stage for a more meaningful and lasting customer relationship.

Overall, the outlook for both the auto and construction industry is bright. As with any business owner, however, you will have some challenges to overcome. If you have an impending remodel or improvement, make a commitment to being openminded about what your customers will demand of your facilities. They will be bettered served, your team will be engaged, your margins will remain strong, and you will have a greater sense of confidence and fulfillment in what you do and how you go about your workday.

Brent Tally is the founder and president of TallyCM, a firm that specializes in the design and construction of automotive facilities. 

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