2018 was a year of changing consumer trends, competitive automakers, and and the race to fully autonomous cars. But what are the driving forces affecting the automotive industry today? It is no secret that the automotive industry has seen significant change over the past year and sales have begun to plateau over the last six months. The following is a list of some of the reasons for the decline and how they are affecting your dealership today.
1. Increasing Auto Loan Interest Rates
According to CNBC, car loan interest rates have been steadily increasing for years and this trend doesn't seem to have an end anytime soon. This is causing car buyers to hesitate before making a purchase, thus extending the sale time and delaying profits. This, among other causes, is also resulting in less showroom traffic.
This is also leading buyers to purchase more slightly used cars than usual. According to Forbes, "the game-changer is the surge of 2-to-3-year old leased vehicles pulsing through the nation’s used car auctions." Although this shift in buying habits doesn't necessarily effect the amount of car sales or profit, it is a notable trend that seems to be growing in popularity.
2. Technological Advancements Increasing the Longevity of Vehicles
According to CBT News, technological advancements have led to an increase in quality and durability of nearly all vehicles. This means vehicles are lasting much longer the time between new car purchases has greatly increased, thus leading to a drop in overall sales. All of the time between sales also increases the amount of money spent on customer retention in order to ensure customer loyalty. Although, the investment is well worth it because we all know it is much more expensive to get a new customer than it is to keep an existing customer loyal.
3. High Gas Prices
Finally, rising gas prices seem to be having an effect on some buyer's purchasing decisions. According to CBT News, a steady increase in gas prices has many waiting to purchase a new car, especially consumers on the west coast who are seeing great spikes in fuel prices. Although this trend is particularity effecting the west coast, most likely due to fuel transportation costs and the devastating effects of the recent wildfire, it may be just a look for what is to come for the rest of the US in 2019.
So, With all of These Negative Affects, How Can You Increase Your Bottom Line this Quarter?
One thing that potential car buyers can't ignore is a direct mail campaign and staffed event. When used properly, they have both been proven to be highly effective, particularly when paired together. At Pinnacle Sales and Mail we pride ourselves on professionalism, maintaining our excellent reputation, and the effectiveness of our super sales events.
We are bringing the dealerships we partner with over 100 opportunities a day to sell a car, tripling their new car sales, and selling over 50% of their used car inventories. All of this is achieved in just one sales event with us.
Email me, the marketing manager, at firstname.lastname@example.org for a quote on a direct mail campaign, staffed event, or both! Visit our website for more information about what we do, testimonials from dozens of happy clients, and even meet our Pinnacle Team.