The US auto industry suffered severe losses during the recent pandemic. Only now are dealerships slowly returning to production and car sales. However, as businesses start to rebuild, many dealerships now face ripple effects from COVID-19 restrictions. The pandemic revealed how unprepared dealers were for business stalling for long periods. As a result, dealership lot management has become increasingly complex. Dealers now seeking to future-proof their business are investing heavily in popular trends and new technology which has begun to reshape the auto industry.
In this article, we’ll discuss the types of industry trends, new and old, that dealers are predicting will shape 2023, highlight the current challenges affecting dealership lot management, and offer modern lot management solutions.
Dealership Trends to Look for in 2023
Continued Supply Chain Shortages
The auto industry is in its third year of limited production on new cars desperately needed for inventories. We’re still combating a supply chain shortage of semiconductor chips, plastic parts, and petroleum-based foam components necessary for building new cars to service dealerships. This strain continues to create an increasing demand for independent transportation that dealerships can’t fulfill.
According to AutoForecast Solutions, dealerships shouldn’t expect these supply chain issues to resolve until 2024. Only automakers making production compromises and removing tech features like cooled seats and heated steering wheels will be able to supply dealerships with cars.
Rise of Electric Vehicles
Younger consumers want the best technological advantage. So, electric vehicle production has become one trend auto manufacturers have been jumping on. We’ve seen significant gains in EVs sold yearly since the pandemic, with sources reporting a new market share of 5.6% since 2021. This is leading more auto manufacturers to pour available resources and new technologies into EV production.
Thanks to continuing shortages of parts and the rising price of gasoline, dealerships should expect decreasing inventories of gas-powered cars, especially as federal legislation pushes the auto industry away from gas-powered vehicles. Some states like California already have plans in place to ban the sale of new gas-powered cars by 2035.
Challenges Impacting Dealership Lot Management
Lot Maintenance
One challenge currently affecting dealership lot management is fleet maintenance. A dealership is responsible for keeping their cars in perfect condition and monitoring wear and tear. If a dealership can’t provide or obtain accurate car health and maintenance reports, moving inventory will be close to impossible. As the auto industry continues to embrace electric cars, standard gasoline engine specialists are becoming obsolete. Electric vehicle repairs will be based on software management and hardware upgrades instead of physically replacing damaged car parts. Dealerships will have to make a choice between up-skilling their staff or hiring new EV software specialists in the future.
Customer Retention
Another challenge baring down on dealership lot management lies with customer retention and return services. Due to the lack of affordable nonelectric cars, overproduction of EVs, and skyrocketing gas prices, we’re seeing an unprecedented number of people opting to keep their current cars longer instead of buying new ones. With dealerships beginning to experience less and less foot traffic at their locations, there might be fewer chances to establish long-lasting relationships with car owners.
What’s more, thanks to their skillsets becoming less relevant with the rise of EVs, more mechanics are opting for freelance positions. This gig economy splits the dealership market into several segments, all competing for a gradually shrinking pool of gasoline car owners. This means customers are seeing fewer reasons to contact their local dealerships to schedule return services.
Turn These Problems into Solutions with Elo GPS
When you account for these challenges and projected industry trends, dealerships will have a difficult 2023. Luckily, Elo GPS can help those struggling with dealership lot management turn problems into opportunities and create long-lasting connections with customers while generating higher revenues.
Elo GPS is a lot management solution designed to help you be proactive in securing and maintaining your assets so you can worry about what you do best—selling cars. By investing in technology like Elo GPS, dealerships gain the ability to access solutions for every concern: quick alerts for the location of all cars on the lot, vehicle health reports, and updates on when would be the best time for customers to service their vehicle with you. Elo GPS creates new ways to stay connected to your customers, so you can be prepared for whatever the future has in store.
Visit us here to learn more about how Elo GPS can improve dealership lot management.