As the first quarter of the year comes to a close, how are car dealers balancing consumer demands, recruitment, and their overall daily operations? Today on Inside Automotive, we’re pleased to welcome back Adam Arens, President of Patriot Automotive Group to get his perspective on how business is faring today.
1. Inventory
We are now in year three of limited production new vehicles, says Arens. There is not one car that was made in ample supply to service the market. This limited production scenario will extend multiple years after production gets at or near capacity. However, the demand for independent transportation continues to grow in the marketplace. For consumers that are holding out on buying a 2022 model because of price, Arens says 2023 will unlikely be any better.
2. Price Increases
Prices across the board have risen a minimum of 10%, even higher in some cases like car prices and gasoline, says Arens. He believes that the auto industry is in for a steep price increase on 2023 models paired with severely limited incentives. Despite this, consumers are willing to spend the money.
3. Market Value vs. MSRP
There is a divide among car dealers about whether to sell new vehicles at MSRP or market value. Arens falls into the former. He says his stores are already hugely profitable and he is most concerned with preserving the longevity of his associates and customers. Arens even went as far as requiring customers to sign a waiver stating that they would not flip the car immediately for profit.
4. Customer Communication
At Patriot Automotive Group, Arens is training his salespeople to be openers, not closers. When gross profit slows down, salespeople can offset it with customer satisfaction bonuses. If the salesperson and the management team stay in constant contact and develop a relationship with the customer, their scores will be higher.
5. EV Transition
We have a fear that EVs will impact our service and parts dramatically, says Arens. Software updates will replace a good deal of service work and programming-based recalls will be done remotely.
Adam Arens has been in the business for 40 years and opened Patriot Subaru back in 2003. Today, he owns three stores in total and has plans to open an Acura store soon. For six consecutive years, Patriot Subaru has been named the Best Place to Work in Maine and has also been identified as having the highest percentage of female associates. Maine, New Hampshire and Massachusetts.
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