Erich K. Gail Joins Recent Automotive News Panel
Dealerships must offer customers an enjoyable experience and inventory that meets their needs to survive. This is the takeaway from the recent virtual Automotive News Retail Forum: NADA roundtable discussion by dealers and fixed operations professionals. Erich K. Gail, CEO of California-based Cardinale Automotive Group, observed that the Coronavirus pandemic spurred American dealerships to develop new ways to use technology and update their processes to accommodate customers’ needs. He warned that dealerships that ease up on their vehicle acquisition strategies or allow operating costs to increase will find themselves unprepared for the next economic shock.
“We’ve spent the last decade preparing for the next black swan event, and I don’t think any of us could have imagined that it would come in the form of a global pandemic,” Gail said. “You have to literally treat your operation like we’re under a constricted market at all times.”
Members of the panel asserted that it’s crucial for dealerships to focus on their service and used-vehicle departments during the pandemic, as gaps in these areas create gaps that online and other competitors will fill. The panelists also cautioned that retailers must prepare for and adapt to the increasing electric vehicle segment, or their dealerships’ business models will be at risk.
You can find the full article on the Automotives News Website or watch the video below
Keep Our Focus on Customers
Jennifer Falada, Ally director of fixed operations consulting, stressed the importance of treating customers as vital resources across the dealership’s departments to realize the most profit from operations. She maintained that introducing the customer to the service department should serve to bring them back to the service department and provide them with a point of contact.
One challenge faced by retailers in 2020 was limited inventory for new and used vehicles. The panelists pointed out that this remains problematic for dealership operations this year. They explained that buying used vehicles from current customers and asking them for referrals to their neighbors can help.
Andrew Spitzer, COO of Spitzer Management in Ohio, explained that acquiring a used dealership led to increased profits for his 19-dealership auto group, saying the company hadn’t previously considered buying vehicles that were more than 10 years old.
To deal with inventory limitations, Matt Bowers Auto Group, located outside New Orleans, uses pay plans, measuring the number of appraised vehicles against the quantity traded in. They rank and reward employees according to their ability to obtain used inventory
Could There Be A Threat from OEM Direct Sales
Some dealers are concerned that new electric vehicle manufacturers will create competition and threaten the franchised dealership model if states relax laws that limit direct sales to consumers.
This was a concern for Evelyn Sames, COO of Sames Auto Group in Laredo, Texas. “The model in general to cut out the franchisee is a scary thing,” she said. She mentioned that she was grateful that Texas’ current legislation protects franchise dealers.
The panelists stressed that dealers must improve their operations today to ward off new challengers down the road or face a loss of business.
Gail maintained the importance of focusing on the task at hand. “Let’s not worry about disrupters,” he said. “It’s our responsibility to ensure that our automotive operations are truly built as fortress dealerships. It’s not luck or magic.