You could see the evidence of last year’s busy pace of the dealership consolidation on the show floor at NADA. A fair share of my dealer conversations today focused on how dealers plan to optimize their investments in additional rooftops for their groups.
“We’re re-doing the service department at one of our stores and building another from the ground up,” the operations director for a nine-store group in the Southeast shared. “You name it, we need it. We’ll probably spend $850,000 today.”
Another dealer shared that he was looking to invest in a new CRM system to drive more operational consistency across his four-store group in the Northwest. “We want everyone working from the same playbook,” he explained. “We used to behave like a group of dealerships. Our goal is to behave as a dealer group.”
As a vendor partner for dealers, I also appreciated how a COO viewed the investments he intended to make for his group: “I need to see a 7-x ROI. It’s not enough for a vendor to tell me their solution will ‘pay for itself.’ That means they’re making the money, not me.”
Here are a few other take-aways from the floor:
Regulatory compliance: Several dealers mentioned concerns about how and where Federal Trade Commission regulations might land. The perspectives varied from “we’re taking a wait and see approach” to a belief that proposed customer record-keeping requirements represented a bit of “overreach” on the part of regulators.
Customer acquisition: I liked how a dealer described their approach to used vehicle inventory acquisition: “We’re focused on acquiring the customer, not just the car,” he said. The mindset means they’ll acquire every vehicle they can, even if they have no intention of retailing it. “A customer who only sells us their vehicle today might buy from us tomorrow if they like the experience.”
Margin compression: I heard more dealers talk about finding their optimal balance between turn and gross, which vAuto’s ProfitTime GPS and Variable Management strategy helps them achieve. “Profits aren’t collapsing, they’re normalizing,” a New York dealer said. “We have no interest in going back to 2019 when we were all cutting each other’s throats as we worked to move more cars.”
This year’s NADA marks the 55th time I’ve been to the convention. A dealer asked if I still get excited about being here. The answer is an unequivocal “Yes!” The energy I get from reconnecting with dealers and being on the show floor knows no equal.
As I head home, I feel a deep sense of gratitude and kinship for everyone who visited the vAuto booth and entrusts us with your business. Thank you all, and safe travels home.
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