No one likes experiencing delays. Be it a business transaction that’s taking longer than it should, an important package that you are waiting to take delivery of, or quite literally waiting at the airport for a delayed flight. That’s what I’ve been doing for the last few hours. 

While waiting, I struck up a conversation with a gentleman sitting next to me. I could tell he was a pilot by the uniform he was wearing. He wasn’t part of the crew flying the plane we were waiting to board, but rather, this was his flight home after a long shift. While chatting him up, he mentioned that our flight was delayed due to severe headwinds. 

“Oftentimes we can predict headwinds and alter our flight path enough to dodge the most severe parts.” he said before adding, “But today’s wind was more difficult to predict and it’s slowing down west bound air traffic. For the same reason, east bound air traffic is flying more smoothly. One plane’s headwind is another plane’s tailwind.” he joked.   

As I boarded the plane, I couldn’t shake the thought that the automotive industry is also facing headwinds. Old thinking must be readdressed. What worked last year doesn’t necessarily mean it work as well or will not work at all.

The consumer is changing.

The consumer is tapped into your digital marketing. They are looking to see if you have the right products and services. Should I buy from you? They can see if you have what they want in your inventory. Today’s consumer is looking for transparency. They expect their questions to be answered quickly and easily. 

Successful dealerships are listening and watching the customers change.

The website is the new showroom, so successful dealerships are maximizing their website. They’re putting more effort in to make sure they have the best merchandising possible: the most up-to-date incentives, OEM specials, as well as explaining the differences between a model years and trim lines.

They are making sure they can be found on a google search, for example.  They are using PPC and SEO to optimize their search results. You can’t buy what you can’t find!  If you are selling or promoting product in a way the customers don’t find attractive or to complicated, they will just hit the back button and move on!  

Consumers today are in charge. They are looking to get their questions answered before they give any of their information to you or submitting a form online. Why? They know the minute a form is submitted; a salesperson will relentlessly reach out. To flow through the headwind, we need to listen to our customers more. We need to make sure our marketing matches the merchandising, and then everything is up to date as much as possible and the way they want to shop.  (Payments vs MSRP). MSRP – We really just want to know how much per month!

Credit approval is also a headwind. 

Credit approval is not easy. Interest rates are going up. When interest rates go up, that means lease rates go up, purchase rates go up and ultimately monthly payments go up. Put simply, money doesn’t go as far today as it used to.  In a credit challenged world we want to make sure we can afford the payment before we send in a lead or setup a test drive! 

Add that to the fact, there’s less used cars and we’re in for some big headwinds. Frankly, the cost of vehicle ownership is starting to exceed what the average American can afford. Now we’re starting to see things like Ford Flex by plans and creative leasing programs. It’s not all bad, we’re also seeing that your pre-owned cars are worth more than ever before if the customer is in a positive equity position.

We do have a lot of headwinds between the economy softening, the cost of the raw materials going up, the cost of money going up the challenges and the credit market. In other words, not everybody qualifies for credit like they used to. Add all that up your finance payment or your lease payment is more than most people can afford today as well as providing multiple options to buy.

There’s going to be a trade-off between practical transportation and fun transportation. We’ve got to get creative with credit, payment plans, and OEM incentives. We have to get creative with our financing and we have to get creative with our term agreements. 

Gas, insurance, maintenance… everything is getting far more expensive. Even the insurance on the vehicles is going up. These are all the automotive industry headwinds we are facing in the coming years. But don’t get crazy, let’s work smarter!  

(Part two coming soon…)

Sean Stapleton | CEO & Co-Founder