The automotive industry outlook since the start of the pandemic has faced nearly constant shortages and supply chain concerns. In 2022 automotive dealers faced additional obstacles in the form of skyrocketing gas prices and rising interest rates. Although U.S. new vehicle prices continue to set record highs, with average transaction prices surpassing $48,000, the lingering inventory shortages faced by automotive dealers have resulted in lower retail sales of new vehicles, down over 20% in the second quarter of 2022 compared to the second quarter of 2021.
Although car dealerships have experienced unprecedented disruptions, the automotive industry outlook for 2023 does reveal many areas for growth opportunities. Auto dealerships need to be agile, responsive, and customer-centered. From a rise in digital automobile sales to increased production of electric cars, Safeguard’s automotive marketing experts can help you identify and make the most of these growth opportunities.
How should dealerships prepare for the automotive industry outlook for next year?
Auto dealers can prepare for the future by taking a proactive approach to their sales and marketing efforts. Growth opportunities include increased electric car adoption, increased online car shopping, and delivering a customer-centered experience to shoppers.
A Rise in Electric Car Adoption
It’s estimated that only around 1 percent of the 250 million cars, SUVs, and light-duty trucks currently on the road in the United States are electric. However, in the first three months of 2022, electric vehicle (EV) registrations were up 60 percent, even as the overall market was down 18 percent. This pushed the EV share of the overall U.S. market to a record high of 4.6 percent. At this rate, by 2035, it’s estimated that up to 45 percent of new car sales could be electric.
This increase in electric vehicle adoption is due in part to the popularity of new and diverse electric vehicle lineups from major car manufacturers, including Ford, Kia, Hyundai, Nissan, and Volkswagen. With a range of EVs, from SUVs to supercars, some of these companies have set exceptionally bold deadlines for their electric vehicle production, including a handful who have pledged to sell only EVs by 2030.
The speed of adoption may also be influenced by a more widely available charging infrastructure, lower battery costs, and stricter emission regulations. As the world goes electric, there are challenges specific to marketing EVs. Safeguard’s automotive marketing experts can help you with innovative marketing for electric vehicles.
Increased Online Car Shopping
Competition for a car buyer’s attention is intensifying, and dealers need to change how they market to consumers to stay competitive. The average automobile shopper will only visit two dealerships in person when shopping for a new vehicle, and for most auto shoppers, the buying experience starts with online research. The shift to online car shopping represents a tremendous opportunity for auto dealerships, providing exposure to new customers and increasing access to their available used inventory.
With a computer or a smartphone, potential car buyers can shop for and buy a car at the time that is most convenient for them. These buyers can explore and select the features they want on a vehicle, even stopping and starting the transaction as desired. Online tools can streamline paperwork, eliminate long waits, and simplify financing.
Online auto buying also has additional benefits, particularly for customers looking for a hard-to-find car, as it allows customers to shop from a much larger geographic area. Although the way people shop for cars is changing, the automotive marketing experts at Safeguard can help you with specialized digital marketing strategies to reach potential buyers.
Car Buyers Want a Customer-Centered Experience
Car buyers want an experience that alleviates as many pain points as possible. It’s no surprise that customer service plays a crucial part in the car-buying experience, whether in person or online. Buyers reported the highest satisfaction levels when the overall car-shopping experience took less time and was more efficient.
Although the way people shop for cars is changing, every interaction between a customer and your dealership is an opportunity to provide excellent customer service. Service departments are another opportunity for auto dealerships to drive revenue and improve customer service. With dealers facing prolonged inventory shortages, the service department has become even more critical for a dealership. Auto dealerships can see the most benefit from their service department by ensuring that it runs efficiently, including having the appropriate equipment and knowledgeable employees and employing automation wherever possible.
With innovative marketing ideas for automotive dealerships, Safeguard’s marketing experts can help you boost traffic and sell more cars. From business essentials that streamline daily operations to customized corporate apparel that ensures great first impressions, Safeguard can supply whatever you need to run your automotive business more efficiently and promote it more effectively.
Key Takeaways
- Auto dealerships need to be agile, responsive, and customer-centered.
- Growth opportunities include increased electric car adoption, increased online car shopping, and delivering a customer-centered experience to shoppers.
- Auto dealerships can prepare for the automotive industry outlook for next year with innovative marketing ideas from Safeguard.
- The automotive marketing experts at Safeguard can help you with specialized digital marketing strategies to reach potential buyers.