Understanding the auto industry and trends in 2021-22 to increase dealership profitability 

The auto industry is expected to witness double-digit growth in 2021, as per the Economist Intelligence Unit report. However, it will not be enough to make up for the plunge caused by the pandemic. A recovery in 2021 will not be straightforward. Therefore, to maximize dealership profitability, auto dealers will be forced to review their operations, processes, finance and insurance (F&I) products, and F&I training to capture every opportunity to increase car sales profit.

Before we dive deeper into the three key strategies to improve your dealership’s profitability, let us take a look at the consumer and automotive industry trends that may impact your dealership’s bottom line. Notably, it is critical to watch your customers’ and the auto industry’s inclination before planning a strategic move in anticipation of growing profits.

  1. The future vehicle intentions:

    The good news for dealerships in the U.S.: 66% of consumers have not altered their timeline for buying a new vehicle because of the pandemic, and 17% plan to buy it sooner than planned. For this reason, there is an excellent opportunity for dealers. Acquire new customers and provide exceptional service to retain existing consumers and tap into the potential to make a second sale.

    Source: Deloitte Automotive Consumer Report

  2. The preferred way of buying a new vehicle:

    The in-person buying experience weighs much more than buying a vehicle virtually. In the United States, 71% of consumers intend to buy a new car in person, and 12% plan to buy partially virtually.

    Source: Deloitte Automotive Consumer Report

  3. The influence of trusted relationship:

    Consumers in the U.S feel most connected with the purchasing dealers as compared to the brand or financial lender. 34% of consumers stated that they place their trust in the dealer from where they bought the vehicle, whereas 23% of consumers do not feel connected with either the dealer or brand. 23% is a significant number of consumers to lose because of their weak relations and trust level in dealers and brands.

    Source: Deloitte Automotive Consumer Report

The opportunity to grab a bigger piece of the pie:

The consumer and market trends show that dealerships can increase profitability as the pandemic does not drastically influence the automotive market.

To point out, the statistics show that customers still prefer to buy in person, and their buying decision is influenced by the trust and relationship with the purchasing dealership.

Is your dealership ready to harness the opportunity to grow profit?

Identifying areas to improve is the key to your success in driving growth in your dealership. With the industry experience of over thirty years, and expertise to adapt to the ever-changing scenarios, we consider the following three strategies that would considerably grow your dealership profitability:

1. The right people:

The process of improving a dealership’s profitability always starts with the right person in the right role. To emphasize, employing uninterested sales and service personnel can impact your profitability and diminish customer relation and trust. If you have the right people on your team, you could close the deals faster and build a strong relationship with the customer. Additionally, it would significantly grow the prospects of making a second sale.

How to assess if you have the right person to achieve the sales goal?

Sometimes the best talent for the job is working in a different position in the dealership. Finding the right person for the right role demands in-depth review and assessment. Therefore, we begin the process by interviewing and evaluating aptitude, behavioral traits, industry experience, and core job proficiency.

Furthermore, we help dealers identify the diamonds in the rough and polish them into a gem to ensure your success.

2. The wide variety of cutting-edge F&I products and training to sell more:

Finance and insurance products can create a revenue center in your dealership especially when it is leveraged strategically.

How to maximize profitability through F&I products?

Firstly, it is essential to offer various cutting-edge F&I products that meet the need of your customers. Secondly, training the staff and establishing a framework for customers to discover the need and value of F&I products being offered is critical. Systematic training leads to improved sales, customer satisfaction, and ultimately maximize dealership profitability.

With this in mind, PRO Team teaches dealership staff a guided discovery process that takes the customer through a series of thoughtful questions. It enables customers to discover the need and significance of F&I products as a part of their personal ownership needs.  As a result, selling becomes less transactional and more consultatory, which equates to higher penetrations and lower cancellations.

3. Customer-centric approach:

Customized finance and insurance products to serve customers’ unique needs are vital to creating a value proposition for the finance and sales department. That is what differentiates your store from competing brands in the market.

How to leverage customer-centricity to grow profit?

Through our years of experience, we found that having the right basket of products to suit the market conditions and customer requirements accelerates growth and procures higher benefits.

For instance, we customized an exclusive bundle of F&I products with expert training and field support to a dealership. That provided our client with value-add offerings that turned into more sales, fewer discounts, and most importantly, retained customers.

Dealership profitability is achieved at the intersection of all the three key strategies:

  • The right people
  • Variety of cutting-edge F&I products and training
  • Customer centricity
Dealership profitability is achieved at the intersection of all the three key strategies: First, the right people. Second, variety of cutting-edge F&I products and training. Third, customer centricity

Do you want to grow your dealership profitability?

At PRO Consulting LLC, we understand that trends and practices in the auto industry are changing continuously. Therefore, we provide customized solutions, products, and training to help you exceed your business goals.

Whether you are a multi-franchise or single-point operator, we can help you close more deals and retain your customers. Get in touch with the PRO team to grow your dealership’s profitability.