Dealer principal Joe Serra on vehicle inventory, the economy, and OEM EV investments

To compete with the likes of Tesla, many OEMs are taking significant measures to accelerate the adoption of electric vehicles (EVs). In the last month alone, Ford sent a notice to nearly 3,000 of its dealers, allowing them to enroll in one of two “EV-certified” programs before the end of October. Additionally, all of the nearly 2,000 Buick franchise dealers in the US will have the option to take a buyout should they not want to sell EVs. Today on Inside Automotive, Joe Serra, president of Serra Automotive, which includes three Ford stores and six Buick stores, shares his perspective on the announcements.

Retail automotive dealers are having a solid year, says Serra. They are sitting well with floor plan dollars and advertising dollars, but he worries dealers may not be providing the level of service clients seek in sales and service. Serra’s market is changing slightly, but he thinks they will still finish the year strong.

The pandemic has forced consumers to change how they live and shop, and businesses have had to adapt to these changes. Auto dealerships have also been affected by the pandemic, with fewer customers and increased online shopping. However, dealers are hopeful that business will return to normal as inventory increases. In the meantime, dealerships are doing what they can to provide for their customers and stay afloat.

Serra is aware of the concerns about interest rates and inflation but is trying to focus on things that can be controlled. “Adjustments are being made, but this is not a new thing. Dealers have dealt with these scenarios before and will continue to do so,” he explains.

When discussing Ford jumping into EVs and the requirements imposed on dealers, Serra commented, “I think it’s interesting that Ford is trying to stay in both the EV and ICE markets. I think they’re being smart by not putting all their eggs in one basket. We’re still learning about the requirements they have imposed and trying to understand the cost factors. It seems high for the number of chargers, but we’ll deal with it when the time comes.”

General Motors’ Buick division has also offered buyouts to dealerships that don’t want to invest in EV retailing upgrades. In Serra’s opinion, “Fringe markets are getting a higher dollar amount of offers than metro market dealers. It’s not only a business decision to consider emotions are often involved as well. You may have to set that aside and do what’s best for your business and your family.”

As inventory shortages continue, businesses are forced to re-evaluate their marketing strategies. From what Serra has seen, some businesses have chosen to remain in the market and focus on their brand, while others have pulled back their marketing efforts altogether. “There is no right or wrong answer, but businesses should be careful not to go ‘dark’ with their marketing.”

When asked if 2023 holds possibilities for Serra to buy other stores, he had this to say, “Absolutely. One of the best parts of my job is allocating capital and making acquisitions. My driving force is to give others opportunities. We’ve had people give us their everything, and this is a chance for them to reap some benefits.”

“We’ve had the ability to grow or recruit if they have the personnel to operate these stores, and we hope that continues as well. We are running on shorter people since the pandemic. We have shrunk the hours of operation due to staffing or inventory. Because of this, our headcount has decreased. It’s not as low as it has been, it has climbed back up a little, but as inventory starts to grow, we will adjust and have more people around,” Serra concludes.