Used cars on dealer lot

News from NADA Is Good News For Used Car Dealers

The National Automobile Dealers Association (NADA) at the 2020 NADA conference in Las Vegas issued an analysis of U.S. auto sales and the economy, which implied good news for the used car dealer.

“All in all, the year ended strong with 17.1 million units,” said NADA chief economist Patrick Manzi. “In December 2019, we saw a continuation of many of the trends we have seen throughout the year.”

December 2019 trends include OEM incentive programs to boost year-end sales with increased incentive spending, a continued shift to crossovers and pickups, and an increase in consumers choosing used vehicles or leased vehicles in light of affordability concerns.

Both of these points are good news for used car dealers. Leasing increases mean the pool of marketable used cars will remain in good supply. It also means more opportunity for used car purchasers who just turned in their lease.

Affordability issues with new cars are also good news for used car dealers for obvious reasons, especially if there is an opportunity to sell a visually similar but model year or two older versions of the new vehicle a purchaser is considering.

Trucks continue to drive sales

In 2019, light trucks continued to drain market share from the car segment. As of December 2019, light trucks represented 72.1 percent of all new light-vehicle sales. Compared to 2018 sales, this is an increase of nearly three percent. By the end of 2020, NADA expects the light truck segment to be larger than 75 percent when compared to an anticipated 25 percent of sales going to new car sales.

Used as an alternative to expensive new car purchases

“As affordability remains a challenge, more consumers chose used vehicles in 2019,” added Manzi. “New cars are getting too expensive for many consumers. Even consumers with great credit or the ability to buy new are instead choosing a used vehicle.”

Quality used car inventories, coupled with these affordability hurdles, and the used vehicle market will continue to pull new vehicle customers away from the new-vehicle market.

It is not all good news however

In 2020, NADA anticipates the used-vehicle sales of 39.5 million units, a similar in volume to what was seen in 2019. Even though you may see more used car buyers, the number of units sold is expected to remain flat.

It is worse for new car sales

Going into 2020, NADA anticipates new-vehicle sales of 16.8 million units – a 1 to 2 percent decrease from 2019.

“Consumers are feeling confident in the economy. Interest rates are low. Unemployment is low,” said Manzi. “In the U.S. economy, things look really good, and I’m confident we will have another solid year in 2020.”

Plan for profit now 

With these predictions in hand, the time is now to plot out the profit for the year, especially as we begin to wrap up the first quarter. How will your used car dealership increase profitability this year with a flat units-sold count? One way is to make more by selling the right mix of vehicles. Certainly, the mix of more trucks and SUVs will help drive more profit.

But making more money per unit is crucial, especially with reconditioning costs. Get a handle on your reconditioning expenditures by adopting software designed to help you plug the holes that are costing you money. Shaving recon time is a sure-fire method for increased profit. Contact your AMT rep today to learn more about AMT’s Suite of products designed to help growth-minded dealerships like yours.

Retired NADA Chairman Says Dealerships Are Writing The Future

Wes Lutz – Former NADA Chair

Recently in a speech in San Francisco, now retired NADA Chairman, Wes Lutz, advocated for dealerships in America to fully embrace the changing times for dealerships. Advising them to truly listen to their customers and discussing what the future of the auto industry holds.

According to NADA News, Wes Lutz is the president of Extreme-Dodge-Chrysler-Ram in Jackson, Michigan. Lutz was the head of NADA and was there to see new-vehicle sales go beyond 17 million units. However, he also predicted that personal vehicle ownership would eventually end.

“As I traveled around the world in 2018, my biggest takeaway was this” So many people want to write our narrative. They say that dealerships are fighting the inevitable, that change is coming and we don’t like it,” he said during his speech. “The truth is that we love change. Change is not happening fast enough for us. Dealers aren’t fighting the future, we’re writing it.”

Lutz continued on: “People prize convenience above all else. People value freedom above all else. The ability to just get up and go without waiting for anyone is a luxury that people don’t want to give up – they can’t afford to. Which is why people have very little interest in giving up their keys, despite what Wall Street or Silicon Valley says.”

With customer convenience at the forefront of dealership focus, software companies have management software available to help make dealership operations, and the customer’s life as easy as possible. Products, like ReconMonitor, have fully customizable forms and triggers that can notify customers of their vehicle’s status, and alert vendors and employees when their work is coming up. No more phone calls required to keep everyone informed.

Are you going to SEMA or AAPEX?

If so we would love to meet with you. While we will not be exhibiting this year, we will be attending the show all of this week. If you are interested in meeting up with the team in Vegas please don’t hesitate to contact Mike Fischer directly. We are looking forward to seeing you there.

Mike Fischer
mfischer@automobiletechnologies.com
Phone: (562) 234-5416


The Mobile Tech Expo – 2011 was a huge success!

A big thank you to everyone that took a few minutes to sit through our education session, and visit our booth. All of your feedback was much appreciated, so please keep it coming. On a side note it was great to see so many tech’s utilizing smart phones to further their business. Every year we see more and more people ready to make the move to eliminate paper, and this year was no different.

We will be reaching out over the next several days to setup online demonstrations for those of you that expressed an interest in taking a closer look.  If you don’t feel like waiting please click on the button below to schedule your demo session today.

Thanks again and speak to you soon!

 

See you at the Mobile Tech Expo – 2011

 

The team is packing up and heading to Corpus Christi Texas, for the 10th Annual Mobile Tech Expo. We are looking forward to seeing everyone again this year!

Stop by our booth and see what we have been working on! Including Bar-code Scanning for the iPhone,  Tablet PC Support, and Much More.

If you are not able to make it but want to see what we have been up to click here to subscribe to our monthly newsletter.