The top challenge dealers in Canada and the United States experienced in 2022 was managing supply chain-driven inventory disruption, according to CDK Global’s 2023 Trendsetter’s Guide to Automotive Retail survey.
Data shows that 68% of the dealers surveyed said this particular issue was very or extremely challenging. They also found that reducing costs (for 31% of dealers) and changing pricing strategies (35%) had a financial impact on their business.
“If there’s one constant in automotive retail, it’s that there’s always an unknown lurking around the corner, so the ability to adapt and thrive during these challenges is crucial,” said David Thomas, automotive industry analyst at CDK Global, in a statement.
He added that the company’s research shows how forward-thinking dealers adjusted within the past year “in an effort to remain relevant among consumers and viable in the industry.”
Forty-nine per cent of the forward-thinking dealerships the company surveyed were able to “carve out” a clear path to business success. Many (44%) have moved away from traditional sales; their focus is now on improving the vehicle buying experience for consumers — with 50% of auto dealers using photos and videos to better estimate service recommendations. Perhaps unsurprisingly, 48% of dealers have enhanced their digital retailing over the past year.
But contrasting this shift are the non-trendsetters, as CDK Global calls them; these dealers over-indexed on reducing costs and changing their pricing strategies. Thomas said dealers need to keep a “steady pulse” on economic and industry shifts to ensure they benefit from continued financial and operational success.
“Integration of new solutions and investment in staff will help create a significant, lasting impact to weather the unknown changes ahead,” said Thomas in a statement.
The full report is available here.
