A couple of related news pieces I recently posted illustrate the state of the retail auto industry in the U.S. First, slowing sales of new cars. Cox Auto forecasts the August SAAR will decline for the third consecutive month to 16.5 million units. Sales volume will actually rise compared to a year ago because of a calendar fluke – Labor Day weekend begins in August this year rather than September. August also has one more selling day. So, the new car market is looking a bit grim.
A few weeks ago, Carvana, the used car vending machine company, announced it was opening a new vending tower in the Los Angeles area. This speaks to two trends. One, used car sales are strong. As new cars get ever pricier, and there is ample supply of lightly-used off-lease new cars, pre-owned starts to look pretty good. Two: Technology is disrupting the traditional dealership model.
Some good news for dealers, however. A study by Harris Poll and Urban Science found that Gen Z buyers – those born in the mid-90’s to early 2000’s – visit more dealerships in the purchase process than any other age group. So, though they are extremely technically savvy, and spend a lot of time online, younger buyers still want to include the dealership in the purchase process.
On to this week’s issue! Manufacturers’ facility image programs are a touchy subject with all dealers. But they are a fact of life in this business. They are also an important consideration in a buy sell. What if you are considering selling your dealership, but your facility is due an upgrade? James Mitchell of Cushman & Wakefield this week dissects whether its better for your valuation to do the upgrade yourself or sell it without an upgrade.
While Automotive Buy Sell Report fully supports dealers’ desire to acquire new dealerships – that’s our bread and butter, after all – growth for growth’s sake is not always a good thing. This week, GlassRatner’s Marc Spizzirri details questions a dealer should ask him or herself before starting to acquire additional franchises.
And of course we have Transaction News.