2023 buy/sell trends to watch: Will things go back to normal this year?

Car dealers are anxious to hear more about 2023 market trends. Bob Morris is the director of the Southeast Region for the Tim Lamb Group, one of the nation’s largest dealership brokerage groups, and has had a bird’s eye view of the business for years. On this episode of Inside Automotive, he joins Jim Fitzpatrick to provide his expectations for how different sectors of the industry will, or won’t, change.

A return to normal?

As all store owners know, there is no guarantee of success without careful planning and refined tactics, but, barring a global catastrophe, he believes that auto-retail is poised to make a return to pre-pandemic growth and demand. Although there are still challenges ahead, the market trends of 2023 are likely to resemble those of the previous decade.

Brands to (not) watch

Dealerships that fail to put their best foot forward are often overlooked by auto brokers. Mitsubishi has historically been shunned by retail groups; however, Morris notes he is beginning to see a shift. “I sold my first three Mitsubishi stores this last year,” he explains. Instead, the franchise he believes to be the worst performer, from a buyout perspective, is Infinity, due to their unattractive storefronts and unimaginative cars.

Franchises aren’t going away

Although many store owners are increasingly worried over the direct-sales model, prophesying it will spell the end of the franchise system, Morris notes that automakers have attempted to enter the sales and service business before, and failed spectacularly. While retailers do have valid concerns over big government and corporations, like any small to medium-sized business owners, the industry’s best chance for future success is competition. So long as dealers continue to compete with each other by paying close attention to 2023 market trends, and offering the services and prices consumers expect, they are unlikely to lose ground in face of automaker greed.

The importance of Fixed Ops

Service departments are often neglected by their dealers. Since managers typically come from a sales background, they have a natural lack of familiarity with fixed operations, viewing it as a necessary evil rather than a profit generator. However, many store owners today are worried that the introduction of electric vehicles will make it impossible to financially support their repair centers since the cars typically require far less maintenance. However, Morris notes that gas-powered cars have grown increasingly more resilient, but service departments have continued to rake in profits. Cars aren’t invincible, and never will be, which means the departments that hire good consultants and train their staff on new technology will still be able to generate revenue in the future, regardless of 2023 market trends.

Automotive retail is weary from supply chain disruptions, financial constraints, and hesitant consumers, and is understandably anxious to know how the market trends of 2023 will differ from previous years. However, the business has been around for a long time, and so long as it continues to stay flexible and prepared, it can be confident in its ability to tackle whatever challenges are in store.

To connect with Bob and learn more at NADA 2023, visit booth #740.

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