From technology to the economy to politics and legislation, the world is moving faster and faster. And while it may not be possible to tell the future with 100% accuracy, we know a few people whose predictions can come pretty darn close.
This week Shawn Mercer, Partner with our attorney friends Bass Sox Mercer, joins us to help dealers gear up for 2019.
Peering into my crystal ball (otherwise known as relying upon my many years of experience advising dealers), in 2019 I see economic unrest, continued downward pressure on dealer profitability, further consolidation of dealerships and opportunity for operators who can control costs and who are positioned to grow.
- Manufacturer incentive programs will continue to regulate dealer behavior and lead to further reductions in profitability. Certain brands will continue to face shortages of the most desirable products. Reduced profitability will encourage more aggressive behavior from competing dealers, which will lead to increased regulatory enforcement activity. Higher interest rates will increase costs for dealers and result in a reduction in access to credit for many consumers.
- Dealers will also face increased competition for talent, particularly in fixed operations and management. It is important for dealers to have a recruiting and retention strategy in place. Successful dealers will offer a positive work environment and opportunity for personnel to grow.
All these challenges, coupled with an aging dealer population, will accelerate dealership consolidation. Concerns about the economy, short-term profitability and long-term industry uncertainty are pressuring dealers to sell. Those dealers who can keep expenses in check, and can successfully negotiate the incentive minefields, have tremendous opportunity to grow and succeed in the years to come.
But wait, there’s more! Tune in over the next few weeks as we share more predictions from some trusted advisors.