As if dealerships didn’t have enough headwinds just in contending with tight inventory and high prices, Cox Automotive chief economist Jonathan Smoke spotted a development he said hasn’t been seen in three decades.
What prompted Smoke to make the assertion on Monday was what surfaced on Friday as the University of Michigan said, “Consumers reported a stunning loss of confidence in the first half of August.”
That statement came as a result of the initial August reading of the Index of Consumer Sentiment, which tumbled from 81.2 in July to 70.2 so far this month. That’s a 13.5% sequential decline and decrease of 30% from February 2020.
Smoke also pointed out that the index now sits at the lowest level in a decade
Richard Curtin, who serves as chief economist for the Surveys of Consumers at the University of Michigan said in an online post that only six times has the index decline this much. Each time, it’s been connected to sudden negative changes in the economy, according to Curtin.
Curtin indicated the only two larger decreases occurred during the economy’s shutdown in April 2020 (down 19.4%) and the Great Recession in October 2008 (down 18.1%).
“The losses in early August were widespread across income, age, and education subgroups and observed across all regions,” Curtin said. “Moreover, the losses covered all aspects of the economy, from personal finances to prospects for the economy, including inflation and unemployment.
“There is little doubt that the pandemic's resurgence due to the Delta variant has been met with a mixture of reason and emotion,” he continued. “Consumers have correctly reasoned that the economy's performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end.
“In the months ahead, it is likely that consumers will again voice more reasonable expectations, and with control of the Delta variant, shift toward outright optimism. Consumers’ reaction to Delta’s modestly higher precautionary measures indicates the difficulty of producing optimal policy responses,” Curtin went on to say.
In his latest “Smoke on Cars” blog post, the Cox Automotive expert looked to extrapolate what the University of Michigan found and what it might mean at your showroom.
“Both underlying gauges of current conditions and future expectations declined with future expectations declining the most. Consumers saw buying conditions for vehicles decline again to the lowest level in at least 30 years,” Smoke said.
The consumer sentiment reading arrived after the Federal Reserve released consumer credit data for July last Wednesday. Curt Long, chief economist and vice president of research at the National Association of Federally Insured Credit Unions (NAFCU) painted a somewhat murky scene about those trends even though at first glance they might be rosy.
“On a seasonally-adjusted basis, consumer credit grew at the strongest rate in years once again,” Long said. “Revolving credit grew at its fastest pace in recent history and twice as fast as the previous month.
“Trends in revolving debt can be difficult to parse; growth may reflect increased spending as consumer confidence is restored, but it may also reflect emergency spending by households still suffering through job loss and nearing the end of enhanced unemployment benefits,” he added.
There’s another AI in the automotive technology space.
Automotive Innovations (Ai), which goes by the same acronym as artificial intelligence, launched its suite of dealership tools on Monday. According to a news release, Ai offers an all-in-one solution that can allow dealers to replace multiple tools, increase profits and get real-time visibility into their business.
The company explained its 360-degree operating solution offers one platform with an entire spectrum of automotive services to increase sales and gross profits in the showroom, F&I office and service drive, “all at a fraction of the price of acquiring these solutions independently.”
Industry veteran Hoss Devine began creating Ai in 2016 after identifying the need to consolidate all of a dealer’s supporting technology under one platform. After a successful pilot, Ai is now in broad release for all dealers to deliver meaningful real-time, actionable data to executive-level and front-line management.
Devine said his format is designed so dealers can digest and act on it to positively impact business in the moment — not in retrospect. He believes his platform is unique because it provides six products in one.
“Dealerships have a lot of technology solutions but for us car guys it goes back to wanting easy-to-use products that offer immediate visibility into our business so we're not managing by looking in the rearview mirror,” Devine said in the news release. “Ai pulls information from the dealer’s core systems and feeds that data into performance to easily identify and act on the critical KPIs that are most important and impactful to their bottom line.
“There’s no reason dealers should have to download data from multiple technology providers and consolidate it into spreadsheets they have to build just to be able to look at data in a way that’s meaningful to them,” Devine went on to say. “Our solution removes that time-consuming task and frees dealers and their teams to manage their business with the real-time intelligence they need.”
Ai’s software can allow dealership management to know in the moment exactly what’s happening with fixed and variable operations, used car reconditioning, F&I, sales, and scheduling. Managers can stop managing by results and instead use real-time data and manage desired outcomes in the moment while opportunities are still viable.
With more tools under development, the platform currently has six products, including:
• OpsVision: The flagship business analytics software can combine data from a dealer’s current systems with artificial intelligence to populate interactive and drillable dashboards for variable and fixed ops to deliver actionable data and pinpoint possible trouble spots — complete with mobile alerts.
• Recon Central: Recon software can organize, consolidate and connect the process to management to provide a real-time snapshot of vehicles, estimated KPIs and inefficiencies in the process, all accessible by desktop, tablet and mobile device.
• SmartChoice: The interactive, intelligent and innovative digital F&I menu is driven solely by a customer’s personal ownership and driving habits, with dealer pricing control, live menu reconfiguration and e-contracting.
• DayTracker: Can bring organization to chaos with a shared scheduling solution that allows salespeople, service advisors and management to create appointments without conflict and feature them on display monitors in the showroom and service drive.
• SmartDesk: A seamless custom desktop integration that is compatible with DMS providers and requires no monthly maintenance fee.
• Ai University: The learning management system for onboarding staff, custom training, meetings in a box and the ability to track staff course completion and score to stay on top of additional training needs.
“We know car guys because we are car guys,” Devine said. “Ai is the direct product of what we wanted to manage a dealership. It makes data analysis a snap, delivers quality reporting, is easy to use, and costs as much as 50% less than the solutions it replaces. It takes car guys to deliver what car guys need.”
For additional information and to schedule a demonstration, call (888) 884-6744 or visit automotiveinnovations.com.
More assistance is in motion for Blue Oval retailers. automotiveMastermind — part of IHS Markit and a provider of predictive analytics and marketing automation solutions for dealerships — recently formed a partnership with FordDirect.
As a result of the relationship, the companies highlighted that the new integrations will be offered to both current and future Ford and Lincoln dealerships in the United States that use Mastermind — the automated sales and marketing platform that can empower dealers to close more deals by predicting future buyers and consistently marketing to them.
There is no additional cost to dealers for the integrations with FordDirect, according to a news release.
The companies explained the partnership is designed to deliver bi-directional data sharing that allows both operations to improve their respective services to Ford and Lincoln dealers.
They said Ford and Lincoln dealers will enjoy the benefits of seamless billing via the OEM parts and accessory statements, automatic co-op processing and integration with FordDirect CRM.
Executives also mentioned automotiveMastermind will be building additional upcoming data-driven integrations such as incorporating VIN data and AXZ pricing into the Mastermind platform.
Mastermind is currently 100% co-op approved for Ford, according to the companies.
“Our mission at FordDirect is to help our Ford and Lincoln dealers sell more vehicles,” FordDirect chief executive officer Matt VanDyke said in the news release. “We believe the benefits of our relationship with automotiveMastermind advances that goal, and we’re pleased to reduce the administrative workload on our dealers with streamlined billing and co-op processing,”
And automotiveMastermind chief executive officer and co-Founder Marco Schnabl added, “Empowering our dealer partners to take a data-driven approach toward building lasting relationships with their customers has always been the focus of automotiveMastermind.
“This new and exciting relationship with FordDirect puts Ford and Lincoln dealers in a great position to capitalize on the innovative technology that Mastermind offers. It will make the sales process more seamless for the dealer professionals, as well as their customers,” Schnabl went on to say.
Dealership mergers and acquisitions aren’t just involving large groups absorbing multiple rooftops nowadays.
Performance Brokerage Services aided in the transaction of a North Carolina franchised store from a single owner to a married couple looking to relocate and run their own store.
On Thursday, Performance Brokerage Services announced the sale of Baker Chevrolet in Red Springs, N.C., from Fred Baker to John and Bridget Carlson.
According to a news release, Baker wanted to become a Chevrolet dealer since age 13. He grew up in the business as his father was a Volkswagen dealer in Concord, which is outside of Charlotte. On July 28, 1987, Baker purchased Baker Chevrolet from the original owner of the franchised dealership in eastern North Carolina.
Courtney Bernhard of Performance Brokerage Services said in the news release, “Working with Fred has been an absolute blessing. His patience to get through this transaction was greatly appreciated and speaks to his character. After meeting his son and lovely wife at the closing, it’s clear why they have been in business for 34 years. I was honored to be able to help Fred retire.”
Baker described what it was like to relinquish the business so dear to him.
“When it came time to sell my Chevrolet dealership, it wasn’t an easy decision,” he said. “I would like to thank Courtney Bernhard from Performance Brokerage Services for putting this deal together and connecting us with a buyer within 30 days of putting the store on the market. Courtney guided both me and the buyer through the entire transaction and kept us informed every step of the way.”
George Chaconas, the exclusive advisor for this transaction and the Southeast partner for Performance Brokerage Services explained how the sales process began.
“Attorney Robert Bass introduced me to Fred Baker who was considering selling his Chevrolet dealership in North Carolina,” Chaconas said. “I had a previous relationship with Fred’s son, Carson, in the powersports industry, so it was a real pleasure to help the family sell their dealership after 34 years.
“I would like to thank our partner, Jason Stopnitzky, in California for introducing us to the buyer, John Carlson. Courtney worked directly with the buyer the entire transaction, and did a fantastic job facilitating and managing the roadblocks along the way,” Chaconas continued.
“I would like to congratulate Fred on his retirement and long-standing service to the community and wish much success to the Carlson family with their new Chevrolet dealership,” Chaconas went on to say.
John Carlson is a former Marine who has spent more than 25 years in the automotive industry. According to Performance Brokerage Services, Carlson always had a dream of owning a dealership.
When he decided to turn the dream into a reality, John Carlson reached out to Performance Brokerage Services to make it happen. John and Bridget Carlson have five children and one grandchild and have been residing on the West Coast. They always knew they wanted to return to the East Coast, so the Baker Chevrolet opportunity was the perfect fit.
“We were looking to acquire our first new franchise automotive dealership and upon the advice of a mentor, we reached out to Performance Brokerage Services,” John Carlson said in the news release. “George Chaconas and Courtney Bernhard exceeded all of our expectations. They guided us through the entire process and got us through a lot of unchartered territory.
“We would not be the owners of our own Chevrolet dealership today without them. I would like to thank Courtney and George for their help and we look forward to acquiring more stores in the future with them,” Carlson continued.
Bernhard touched on what made this transaction unique.
“Working with first-time buyers can be a challenge,” Bernhard said. “However, John and his wife Bridget were phenomenal and on top of every hurdle along the way.
“The attorneys on both sides of the transaction were instrumental in getting this deal to the finish line, and I was very fortunate to be a part of it all. I wish everyone continued success and look forward to crossing paths again in the near future,” Bernhard went on to say.
The dealership will remain at its current location at 914 East Fourth Avenue in Red Springs and will be renamed Carlson Chevrolet.
The seller was represented by Logan Parker from Bass Sox Mercer.
The buyer was represented by Les Chayo of Chayo Law.
Over the last five years, Performance Brokerage Services said it has represented for sale more than 200 automotive dealerships.
For Toyota and Lexus dealerships in southern California with overwhelmed service drives and recon shops, help literally is on the way.
On Friday, Universal Technical Institute announced the first local cohort of students have begun their accelerated 12-week training to complete eight Toyota and five Lexus class credentials preparing them to join one of the largest dealer networks in California.
Officials highlighted the Toyota Professional Automotive Technician (TPAT) program delivers specialized training on both Toyota equipment and vehicles and helps students prepare to complete certification testing by the National Institute for Automotive Service Excellence (ASE).
Students receive hands-on technical training, explore high-demand career opportunities, and achieve Certified Technician status for a vast Southern California Toyota and Lexus dealer network.
“Trained auto technicians are in great demand and are the key to any successful dealership,” said Joseph Myers, technician development manager for the TPAT program at Toyota Motor North America.
“We are grateful for the opportunity to collaborate with UTI to fulfill the pipeline of new talent while providing stable jobs and career security that aims to give vehicle owners the most satisfying service experience possible,” Myers continued in a news release.
Dan Johnson is senior vice president of fixed operations for Larry H. Miller Dealerships, which owns Toyota of Corona.
“We are thrilled to have the Toyota Professional Automotive Technician program at UTI in the Inland Empire,” Johnson said in the news release. “We have our dealership 30 minutes away from the campus and another in the San Diego area.
“Business is booming and we need more technicians to take care of our customers. We look forward to hiring UTI graduates and the career opportunity we offer to those joining our winning team,” Johnson went on to say.
The grand opening of the TPAT program on Friday was attended by local elected officials from the city of Rancho Cucamonga and former Congresswoman Loretta L. Sanchez, now serving as an independent director of the board at UTI.
“For those of us who call Southern California home, it’s no surprise that skilled automotive technicians are valued and in high demand,” Sanchez said. “It’s inspiring to see students so focused on their trade and learning from among the best instructors — all at a campus with advanced technology, resources, and equipment to create a real-life learning environment. These students will serve as an inspiration to many Californians seeking this type of education.”
UTI partners with students to help them navigate the competitive job market. Students who complete the TPAT program can explore career opportunities, receive hands-on training on the latest technologies from Toyota and Lexus, and learn from other UTI graduates and local employers about the high need and earning potential for trained technicians.
“These students are receiving training in automotive technology that takes dealership technicians years to finish and the job market is eager to welcome new talent,” said Migdalia “Mig” Vazquez, who is the campus president. “This is especially true in southern California where we have one of the most active transportation and logistics corridors in the United States.”
The U.S. Bureau of Labor Statistics projects that by 2029, total employment for automotive, diesel and collision repair technicians will exceed 1 million. To help reach that total, officials said the transportation industry needs to fill nearly 100,000 technician job openings on average annually during this period.
The Toyota TPAT program will accept applications at the Rancho Cucamonga campus throughout the year.
For more information or to enroll, students should visit www.uti.edu/toyota.
We went straight to the orchestrator of the 2021 Cox Automotive Dealership Staffing Study for this episode of the Auto Remarketing Podcast.
Cox Automotive senior industry intelligence manager Angela Drake shared additional insight about the study, which was initially distributed on Monday.
To hear the conversation, click on the link available below, or visit the Auto Remarketing Podcast page.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
While perhaps not as light as their inventory levels nowadays, dealerships appear to be short on personnel, too, especially in the departments that generate the most store revenue.
Like many industries, Cox Automotive indicated, the U.S. automotive retail segment is struggling to find enough employees for dealerships to be fully staffed, much less meet their 2021 growth goals.
In fact, according to the 2021 Cox Automotive Dealership Staffing Study released on Monday, 72% of franchised dealers surveyed said that finding and hiring the right employees is currently a challenge.
Furthermore, the study showed that a majority of dealership leaders — approximately 65% — report that they plan to increase the total number of employees in the dealership this year, while approximately 34% said they plan to maintain their staffing level.
And skilled labor to keep the service drive flowing and reconditioning in motion is of great importance to dealerships.
Cox Automotive discovered that expanding the number of service technicians is the highest priority for dealership leaders, with 60% planning to increase the number of service technicians this year, followed by new-vehicle sales associates (54%) and used-vehicle sales associates (48%).
Analysts pointed out that dealers’ desire to grow their operations comes at a time when business is strong.
According to the Q2 Cox Automotive Dealer Sentiment Index, opinions related to the current market reached a record high in Q2 for both franchised and independent dealers, and the profit index set a record high, as well.
Cox Automotive noted that the three-month market outlook index reading is an increase from last quarter and — perhaps even more importantly — equal to Q1 2020, which was the final pre-COVID-19 reading.
“While the outlook for dealerships has never been better, dealers state that finding employees is a challenge due to people not returning to their positions or the workforce post-pandemic,” Cox Automotive senior industry intelligence manager Angela Drake said in a news release highlighting the staffing study.
“The traditional lack of interest in working at dealerships is exacerbated this year by pandemic-related stimulus money and enhanced unemployment benefits,” Drake continued. “The good news is that our study found overall interest in working at dealerships is growing, and a growing number of employees in non-automotive jobs view their skill sets as transferable to the dealership.”
Job seekers often have skills dealers want
When asking potential job seekers why they would not want to work at a dealership, the Cox Automotive study showed that 32% indicate they did not have the necessary skills.
However, the study also determined that heavy digital dealers — operators that Cox Automotive classified as dealers who significantly invest in digital retailing tools — said the right employee doesn’t need automotive experience.
Instead, analysts shared dealers are looking for individuals with the following characteristics:
— Willing to go above and beyond their specific job responsibilities
— Good communicators across all communication channels (verbal, written, video)
— Can easily adapt to a quickly changing work environment
— Tech-savvy and comfortable with learning new technology
“As pandemic unemployment assistance winds down, dealers have the opportunity to promote their job openings to a new group of job seekers who may not have considered working in a dealership,” said Bob Kostkan, senior director at Cox Automotive University.
“Job seekers with restaurant and retail experience usually have the mindset, potential and skills to be successful at a dealership but may not realize that automotive experience isn’t a prerequisite for many of the open positions,” Kostkan continued in the news release. “The most successful dealers offer employees onboarding and comprehensive career development training beyond what their OEMs offer to enhance engagement and retention.
“In fact, the top two most popular training enhancements indicated in the Dealership Staffing Study for now and into the future are online/digital tools and communication skills,” Kostkan went on to say.
Study background
Analysts mentioned that data for the Cox Automotive Dealership Staffing Study is gathered via online surveys.
Cox Automotive said the results were based on 440 franchised and independent dealership employee respondents, comprising 151 individual contributors, 127 department managers and 182 dealership leaders, and 394 employees at non-dealership companies, comprising 147 individual contributors, 63 department managers, 147 leaders and 37 unemployed active job seekers.
Analysts added that respondents were based across the country and responded to the survey between Feb. 23 and March 10.
The entire 2021 Cox Automotive Dealership Staffing Study can be downloaded via this website.
More details about Cox Automotive University are available online.
As a dealer, you want payment for services rendered, correct?
To help make sure that happens in the smoothest possible way for your customers and employees, CDK Global launched CDK OnePay, a dealership-wide payment solution fueled by Global Payments.
The companies highlighted that CDK OnePay is designed to help dealers create a frictionless customer experience with end-to-end seamless payment technologies and expanded payment options.
CDK OnePay can enable dealerships to request payments via text, email, or in person while allowing their customers the convenience to pay with credit, debit or digital wallets via mobile phone according to their preferences.
The solution also can help dealerships complete an integrated invoicing process from start to finish within the CDK Drive dealer management system to shorten customer wait times, reduce costly cashiering errors from data reentry and streamline end-of-day reconciliations.
“CDK OnePay is another example of how we’re driving innovation of the tools dealers use every day to improve efficiency and profitability in their operations,” CDK Global chief operating officer Joe Tautges said in a news release.
“By partnering with a leader in the payments industry like Global Payments, we are significantly enhancing the payment experience at dealerships by streamlining dealer workflows through Fortellis integrations and providing more options like virtual payments and contactless terminals. It is a true win-win for dealers and their customers,” Tautges continued.
CDK OnePay is offered to dealers with no upfront or recurring subscription fees from CDK.
Drew Conkle is chief operating officer of Brondes Auto Group and participated in a pilot program of CDK OnePay. The news release also recapped Conkle’s experiences with the tool.
“In a digital-forward world, and in a time when health and safety are top priorities, we’re seeing more customers ask for mobile payment capabilities and contactless alternatives,” Conkle said.
“Meeting our customers’ payment needs and expectations with CDK OnePay helps ensure we’re providing the best possible experience at our dealership and increases the chances of getting their repeat business and additional revenue,” he added.
Global Payments Integrated president Bob Cortopassi also offered his perspective on what this tool can do for dealerships.
“Technology has transformed payments in recent years, but many industry sectors are still catching up,” Cortopassi said. “We believe it’s our responsibility to provide businesses and consumers with state-of-the-art payment technologies and commerce-enablement solutions.
“By tightly integrating with CDK products, we have delivered a truly integrated commerce platform that brings more payment flexibility to automotive retailers and pushes them to the leading edge of payments,” he went on to say.
For more details, visit cdkglobal.com.
Digital Dealership System, or DDS, a dealer screen marketing company, is the newest MarketCenter supplier for Chrysler, Dodge, Jeep, Ram and Fiat dealerships.
The company has a dealer list of over 1,000 installations complete throughout the U.S. What’s been most popular among its offerings is the company’s messaging on digital signage and kiosks, which works to make those dealerships' in-store customer experience more dynamic.
The key? DDS can source from any hardware provider best-suited for each dealership's needs and support customizable content across the showroom, customer lounge, service lane, in addition to leaderboards and kiosks, the company shared in the press release.
"Digital Dealership System provides dealers with the opportunity to increase service revenue and closing ratios by personalizing the customer experience through screen technology," said Todd Katcher, founder of Digital Dealership System. "We are proud to be a part of MarketCenter and look forward to servicing our dealer partners."
As a MarketCenter supplier, Digital Dealer System offers Chrysler, Jeep, Dodge, Ram, Fiat U.S. dealers service through Stellantis' MarketCenter within the DealerConnect portal.
In this case, it could be considered positive that dealers have their heads in the clouds.
This week, Dominion VUE DMS released results of its 2021 DMS Dealer Sentiment Survey, a commissioned independent study involving 220 DMS decisionmakers from dealerships to determine attitudes toward their current dealer management system.
The cloud-native solution provider highlighted five key findings from dealers, chief financial officers, general managers, controllers and fixed operation managers at large and small stores across the U.S. who participated. They included:
— Microsoft is the preferred software provider over Google, IBM, Amazon or Apple
— Security, features and support were dealers’ reasons for selecting current DMS
— Dealers unsatisfied with ease of use, price and support of their current DMS
— Features and security are among the top reasons for switching DMS
— Most dealers prefer a cloud solution for security advantages
“Selecting a DMS is one of the most important decisions for a dealership. Choosing the right one is the first step for dealers to break free from outdated processes and take back control,” Dominion DMS president Sharon Kitzman said in a news release.
“This study indicates DMS choices are trending towards secure, cloud-native solutions with modern features, all backed by superior support,” Kitzman continued. “Providers that can offer those benefits will have an advantage as dealers demand more flexible, responsive systems that deliver a better experience for their employees and customers.”
To download the full report, go to VUEDMS.com/2021survey.
