view newsletter online  September 15, 2024

Recently PRIORITY Payment Systems Local has joined the Association. I would like to introduce you to Andrew Pollina Vice President, Head of Sales.  When I spoke with Andrew about PRIORITY, I was intrigued by the opportunities that may benefit our MTIADA Members. I asked Andrew to contribute to this month’s newsletter to introduce himself and explain more about PRIORITY and the benefits that this company may be able to provide to our Independent Dealers.

Thanks Chad! Hello. My name is Andrew Pollina with PRIORITY Payment Systems Local

Priority Payments Local is the newest Associate member and the No. 1 Automotive Payment Processor in the country. As an introduction to the association, we would like to offer all MTIADA members the following benefits:

NetZero™ processing – 0 fees on credit card transactions

Free equipment upgrades for all in-store terminals

AutoLink™ - DMS integration payment portal, which will improve your reporting/reconciling and streamline all transactions.

Proprietary Floor planning – rates are 2 percent less than national annual rate and can qualify for up to 10 percent of gross annual revenue

Join the more than 1,300 rooftops that are currently benefiting from our automotive payment processing and fintech solutions. These groups have realized an average annual savings of $90,000 per store or 82 percent of their total monthly processing fees.

When can we schedule a demo tailored to your specific needs?

One question I often here is, “What does the Association do for me?” I’m sure you have asked yourself that question, and I’m glad you asked. There are so many ways the Association is working behind the scenes to improve your opportunity to be successful that we could go through it for hours.

As with any endeavor, there is strength in numbers. With more numbers, there is more strength and clout. Our biannual legislative session begins in January and our influence and efforts keep legislation that is harmful to our industry from going through with no resistance. We send board members to Helena on your behalf to lobby for laws that are beneficial and oppose laws that can hurt us. We scan the docket daily looking for items that may affect you.

We are involved in the education of yours and your employees’ children by giving scholarships to deserving students. We have donated to Project Hope in the name of Independent Auto Dealer’s Association on your behalf and have put ourselves in front of bank presidents and other influential parties to explain the difference between a used car lot with no consideration for the community and our members that are dedicated to improving the independent dealer’s community.

We also have hours upon hours training available at any time and host our annual convention where you can learn from industry experts.

We send out monthly publications that include tips and legislative articles that keep you abreast of current and pending laws that will affect the car business on a national scale. There are 20 groups for retail and buy here pay here dealers and so much more.

 

The wholesale used vehicle market saw prices increase for the first time since April at the start of September.

The overall market was up 0.1 percent in the opening week of September, according to BlackBook’s Market Insights. The last time for the market to be in positive territory was the final week of April.

“The market continued to report stability last week, with a majority of the truck and crossover/SUV segments experiencing an increase in values, resulting in an overall market uptick of 0.1 percent. In contrast, the same week pre-COVID averaged a decline of 0.12 percent,” BlackBook reported.

Truck and SUV price gains powered the change in the market. The 13 segments of trucks and SUVs were up collectively 0.09 percent or $17. Seven categories reported increases led by small pickups jumping 0.59 percent or $127.

Full-size luxury crossover SUVs experienced a 1.09 percent drop or $430. BlackBook noted it was the largest drop for the segment since last December.

All nine car segments followed by BlackBook fell in price. The average fall was $31 or 0.2 percent. Sports cars were down 0.43 percent or $93.

Activity on the auction lanes remains steady. The conversion rate was 59 percent last week, a drop of 2 percent from the end of August.

 

By Ed Curry

In an era marked by rapid change and unforeseen disruptions, businesses are grappling with a constellation of challenges that are reshaping their operations and strategic priorities.

From the aftershocks of a global pandemic to evolving consumer expectations and regulatory landscapes, auto dealers must navigate a complex and dynamic environment.

Here’s a look at six critical issues affecting today’s business world in general and the retail used car business specifically.

1. Lingering Effects of Pandemic
The COVID-19 pandemic has left an indelible mark on businesses worldwide. Beyond the immediate health concerns, the pandemic has accelerated shifts in work patterns, with remote work becoming a new norm for many organizations. Companies have had to swiftly adapt to this change, investing in technology to support virtual collaboration and ensuring the well-being of their workforce. As we move forward, businesses must continue to be resilient, embracing flexibility and preparedness for future disruptions. The pandemic also “retrained” our salespeople in reference to the traditional “Selling Systems” that have been used for more than a century and have been proven many times over throughout the years. Things like not using a demonstration drive to help close a deal and offering credit qualifications information before a prospect even visits a dealership are a couple examples of negative trends in the showroom.

2. Inventory Availability
The pandemic exposed vulnerabilities in global supply chains, leading to widespread disruptions. Factors such as factory shutdowns, transportation bottlenecks, and geopolitical tensions have caused delays and increased costs. To mitigate these risks, businesses are re-evaluating their supply chains, seeking to diversify sources, and investing in technologies that enhance visibility and efficiency. Companies that can build more resilient and adaptive supply chains will be better positioned to weather future storms. As a reaction to the disruptions, many dealers developed the tendency to over buy inventory and even buy inventory that was not in their normal operational business plan. This turned out to be a very tragic mistake for many dealers who got caught holding the wrong inventory or too much inventory.
All dealers should place safeguards on their inventory procurement processes and place more focus on them permanently.

3. Move Toward Digital Retailing
Digital transformation has moved from a strategic advantage to a critical necessity. The need for remote work solutions, e-commerce platforms and data-driven decision-making has driven a rapid adoption of digital technologies. Businesses are investing in cloud computing, artificial intelligence and automation to streamline operations and enhance customer experiences. The challenge lies not just in adopting these technologies but in integrating them effectively into existing processes and culture. There are currently a multitude of companies that are now offering new and enhanced technologies to auto dealers. So much so, it is becoming difficult to pick a product and stick with it.

4. Evolving Expectations of Consumers
Consumer preferences have evolved significantly in recent years, driven by increased digital engagement and a heightened awareness of sustainability. Shoppers are now seeking personalized experiences, ethical products, and convenience. Companies must stay attuned to these shifts, leveraging data to understand customer needs and preferences. Adapting product offerings, marketing strategies, and customer service approaches to align with these trends is crucial for maintaining competitiveness. Since the beginning of the Covid Era, many new companies have started springing up with the goal of conducting most, if not all, of the purchase and financing transactions digitally. Thereby, foregoing the need to visit a dealership or to cut down on the time invested at a dealership when buying a vehicle.

5. Increased Regulatory Scrutiny
As businesses navigate these challenges, they also face increased regulatory scrutiny. Governments and regulatory bodies have introduced new rules related to health and safety, data privacy, and environmental sustainability. Compliance with these regulations not only requires careful attention to legal requirements but also proactive engagement with regulatory changes. Companies that embrace a culture of compliance and transparency will be better equipped to manage regulatory risks and build trust with stakeholders. With the CARS Rule introduced by the FTC, we will face more scrutiny and have to become better at document storage and security than ever before in our industry’s history. And while the Rule was Stayed recently, the overwhelming majority feel the delay is only temporary.

6. Out of Control Operational Costs
Rising operational costs are putting additional pressure on businesses. Inflation, increased wages and higher prices for raw materials and logistics are driving up expenses. To manage these rising costs, companies need to adopt efficient operational practices, explore cost-saving technologies and consider strategic adjustments such as renegotiating supplier contracts or optimizing energy use. Balancing cost control with investment in growth and innovation is essential for long-term success. Every aspect of running a car dealership has been touched by the increased costs and should now be more of a focus than at any time in our industry’s history.

Conclusion
The modern business landscape is characterized by a convergence of challenges and opportunities. Companies must navigate the fallout from the pandemic, address supply chain disruptions, embrace digital transformation, respond to changing consumer preferences, comply with increased regulatory scrutiny and manage rising operational costs.

By adopting strategic approaches to these issues and remaining agile in the face of change, businesses can not only survive but thrive in this dynamic environment. Adaptability, resilience and a forward-thinking mindset will be key to achieving sustained success in the years to come.