Pub. 8 2018 Issue 4

12 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com M uch has been said about all of the changes to the car indus- try. There is no question that we’ve already faced a lot of change and there is no ques- tion that there is more change coming. General Motors CEO, Mary Barra, said it best, “We’re going to see more change in the next five years than in the previous 50.” Dealers must face the potential impact of subscription vehicles, ride share, autonomous vehicles, the electrification of vehicles, the amazon type click purchase of vehicles and vehicles being delivered through giant vending machines. While these are all very real and will change the landscape, I believe, as do many others, that the majority of customers are still going to want to see the vehicle in person, drive it, and experience it before purchasing it. When something goes wrong or the vehicle needs service they are still going to want a local professional available to diagnose and fix the problem. So, the dealership model still plays a huge and vital role in the future of the car business. But it won’t work like it does today. Pricing pressure isn’t going away, the ongoing deterioration of gross profit will continue – technology almost guarantees it. Customers are demanding transparency, speed and some level of control over the transaction. They want information and they will decide how and when they get it. If that information is about their trade value, a lease payment or a vehicle service contract and they want that information from the comfort of their living room they are going to get it. Dealers who bury their heads in the sand will ultimately be left behind. Underperforming in F&I or service will not be an option. In the past these departments took a back seat to sales. It was nice to do well in F&I or service but it wasn’t a necessity. It is now. F&I and service departments will go from being the icing on the cake to being the entire cake. Without them, you likely won’t have a viable business model. Dealers will have to lower their cost to sell a car. There is no question that the current expense structure with the future gross margins is a recipe for failure. But you won’t be able to expense control your way to a profit. You have to hit on all cylinders. There is so little margin for error and so much at stake. Focus on what you can control. At Automotive Development Group, we believe that training should be at the very core of every proposed solution. No matter what your dealerships greatest area of need is today, or what your challenges will be in the future, training should be part of your solution. Poor Service Gross, Underperforming F&I Results, High Employee Turnover, Difficulty Recruiting, CSI Challenges, Internal Cultural Issues, all of these challenges should have training at the heart of a comprehensive plan to improve. Many dealers have already tried to solve these challenges with technology. What they’ve found is that while technology is important, technology without a compressive plan around human capital will always fail. There’s no silver bullet. This business can still be fun, but taking on all of these challenges without the right training partner is a daunting task. Dealers of all sizes need the right outside training partner. By leveraging which programs and products you sell, you can bring in the right partner in a very cost-effective way.  For more information, please contact Francis Fagan with Automotive Development Group at 312-608- 4979 or ffagan@adgtoday.com . Francis is the Regional Training Director for Illinois and Indiana. At Automotive Development Group we put the emphasis on training. Visit our website for our training calendar and to meet our nationally renowned trainers. www. AutomotiveDevelopmentGroup.com Dealerships Are Not Going Away but Dealerships As They Look Today Are BY JOEL KANSANBACK EXECUTIVE VICE PRESIDENT OF AUTOMOTIVE DEVELOPMENT GROUP CONSULTANT’SCORNER