Being “green” means more than just selling more EVs.

In many respects, British Columbia is leading the country in green energy innovation and sustainability initiatives — and new car dealers are playing an increasing role.

As the face of BC’s electric vehicle rebate program, our members have an active part in transitioning consumers to zero emission vehicles, but what may not be as apparent is the number of additional ways in which we are demonstrating a commitment to sustainability.

For car and truck dealerships, sustainability is more than a buzzword; across British Columbia, as individual dealerships invest in renovating or developing new operations, we are seeing an increasing ‘greening’ of our dealerships — and it is occurring across all brands.

A perfect example is the Dilawri Group and Volvo Car Canada, recently opening North America’s first Volvo Retail Sustainable Experience (VRSE) facility in Richmond. The entire facility is powered by renewable energy sources, including hydro-electric energy and on-site solar energy generation and is LEED certified (Leadership in Energy and Environmental Design) — the most widely used green building rating system in the world.

Following environmentally-friendly practices makes sense from a number of perspectives; it can improve efficiency and be a wise business decision over the long term. Leadership in this area can impact attracting and retaining a new generation of staff who are increasingly conscious about the environment. And because dealerships are in many cases, pillars of the community, the adoption of environmentally sustainable practices sends a strong message to consumers.

A July poll conducted by Forum Research found that more Canadians identified the environment as the most important issue facing the country. It stands to reason that many consumers might place an emphasis on a store’s business practices when deciding where to buy a vehicle, just as they do with other retail purchases.

On a broader level, BMO recently surveyed more than 130 dealer principals and C-suite leaders across Canada and the U.S. to explore how they were tackling a reduction in their carbon footprint. Findings revealed that 39 per cent of dealerships have plans in place to reduce their carbon footprint over the next 18 months, by taking steps to optimize service bays to support electric vehicle repairs and/or installing charging stations.

In other cases, it may involve energy saving upgrades such as solar panels, LED lighting or high-efficiency heating to their operations.

With the future of the automotive industry looking more electric every day, new car dealers are showing an unwavering commitment to a more sustainable, eco-friendly automotive industry.

Clearly there is work we can all do to shape a cleaner, more sustainable future — but new car dealers are making progress, one innovation and one dealership at a time.

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Some jurisdictions are preparing to power EVs and others are lagging.

The adoption of zero emission vehicles (ZEVs), especially in BC, is seen as an increasingly important factor in reducing greenhouse gas emissions and creating a cleaner environment for future generations.

There are several factors that will continue to influence consumer decisions. Canadians need to have access to clean energy vehicles at various price points. They also require a comprehensive charging system that will keep pace with ZEV sales — in rural and remote areas of the country, along major transportation corridors, and where drivers live, work, and socialize.

To achieve true environmental success, however, it is critically important that the power grid is clean. In the U.S., electric vehicles are drawing their power from a grid that typically includes a mix of fossil fuel and renewable power plants — but the good news is most countries, including the U.S., are now pushing to clean up their electric grids.

In British Columbia, much of our electric supply is already generated from renewable sources and BC Hydro has been planning for increasing demand. The corporation anticipates there will be approximately 350,000 zero emission vehicles on BC roads by 2023, which in itself will add an additional 1,050 gigawatt-hours of electricity load per year.

As governments encourage Canadians to make the transition to zero emission vehicles to reduce greenhouse emissions, there also needs to be a concerted effort to ensure our electric grid can handle the increasingly extra load, and in a manner that is affordable and reliable, and ensures future energy bills are not out of touch for the average Canadian.

Reports from the International Energy Agency and Canadian Climate Institute suggest our country will need to double or triple electrical grid capacity by 2050 if Ottawa is to meet its net-zero greenhouse emission targets.

Construction on BC’s Site C project began in 2015 and remains on-track to have all six generating units, in-service by 2025. Once complete, Site C will provide the equivalent amount of energy needed to reliably power about 450,000 homes or 1.7 million electric vehicles per year in BC, according to BC Hydro.

Next spring, BC will also issue its first call in 15 years for large new utility-scale projects and aim to have new sources of electricity by 2028. It is seeking renewable projects only, such as wind and solar.

In August, when Ottawa announced new regulations to get Canada’s grid to net zero by 2035, federal government modelling suggested a staggering $400 billion will be required to replace aging facilities and expand generating capacity in the country’s electric grid. This investment they say, will be required to respond to the pressure placed on the system from electric heating and cooling systems, electric vehicles and population and economic growth.

Reports from the International Energy Agency and Canadian Climate Institute suggest our country will need to double or triple electrical grid capacity by 2050 if Ottawa is to meet its net-zero greenhouse emission targets. Both suggest it’s doable, however, because government modelling and established targets for zero emission vehicles will help create some level of predictability.

OEM Associations and CADA (in its Road to 2025 report) agree, if Canada is to achieve the target for all new light-duty cars and passenger trucks sales to be zero-emission by 2035, more ambitious federal and provincial government action is required to enhance consumer incentives.

Also required are ongoing investments in convenient, accessible and fast charging infrastructure across Canada, consumer education, and development of an electric vehicle battery supply chain.

The post Can our electric grid handle anticipated growth in EV adoption? appeared first on Canadian Auto Dealer.

Customer loyalty can mean a steady supply of highly profitable sales now — and in the future.

As our sector turns the corner from the pandemic and accompanying supply chain issues that have plagued the sector for many months, never before has the reputation of individual new car dealerships and investment in customer relations been more important.

During this challenging period, dealership staff have had the difficult task of managing customer expectations amid a lack of inventory. This was especially true for zero emission vehicles and luxury/sports vehicles.

Buyers were often placed on waiting lists and in many cases, sales teams and other dealer staff became a sounding board for frustrated consumers who were less eager to buy what was available — and subsequent economic uncertainty had them holding on to their existing cars far longer than usual.

Dealerships that have responded patiently while also proactively engaging customers, personalizing their approach, marketing special offers, and ensuring there is ongoing communication, have been cultivating consumer loyalty.

As our sector rebounds, there is a level of uncertainty as to how the next several months may unfold. Obviously, there is pent up demand, particularly in the zero-emission vehicle market.

Whether consumers jump at opportunities presented or demonstrate a new level of patience for the right deal and the right product is up for debate. Those who have invested in forging relationships and gained an understanding of preferences of potential customers, means they are equipped to map the vehicles in their current and developing inventory to buyers who may be interested in them.

As the new car market stabilizes and factory production increases, this may bring prices down in both the conventional and zero emission vehicle market. That will be good news for the consumer, but it also means competition may be fierce.

The price or preference for a particular brand are important considerations for anyone in the market for a new vehicle but we must never take for granted the value of customer loyalty and their critical impact on current and future sales.

A customer focused experience remains crucial for businesses to succeed. Loyal customers are less likely to negotiate, more likely to generate service opportunities, and contribute to referral business — and during uncertain times, customer loyalty can mean a steady supply of highly profitable sales now and in the future.

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As the industry returns to a more normal state, dealers will have to adapt and adopt some of the best practices from the pandemic.

As we move past the midway point of 2023, it’s important to take stock of how the first six months have played out, and envision how the remainder of the year may unfold.

It’s no secret that the year to date has been a mixed bag for the entire automotive industry with lingering supply chain issues and sparse inventory across much of our sector.

At the same time, high interest rates, inflation and economic uncertainty remain issues of concern because they impact consumer purchasing power. These ongoing dynamics have forced dealerships to be as creative as possible to anticipate and manage consumer behaviours and expectations.

Over the last many months, with consumer demand far exceeding supply, dealerships had the upper hand with respect to pricing, but that may change as we see production increase and economic clouds continue to hang over consumers.

It likely means dealers will need to be flexible in their pricing and service offerings while also providing incentives that encourage sales — to help both the sector and consumers continue the path to post-pandemic recovery.

With consumers conceivably having more power to shop for the best deal, dealers will need to stand out. Over the past few years, many of us have become more digitally savvy — and now, after being accustomed to browsing online for many months, we know consumers expect a level of service that matches what they can access online — easy, fast, and convenient. And that means sales and marketing teams need to up their games to provide the best customer experience through every stage of the buyer’s journey — online and at the dealership.

As the industry shifts back to a buyer’s market, dealerships are having to shift their focus from what to sell to how to sell — and how to do it better than their competitors.

That’s where digital retailing comes into play and can benefit both the car-buyer and the dealer. It enables dealers and OEMs to find new, creative ways to sell vehicles, including getting new products in front of customers before they are even manufactured.

Of course, one of the most attractive vehicle-types on the market comes in the form of a ZEV, whether that be a car, truck, or SUV. From legacy brands to start-ups, all automotive manufacturers are rolling out and planning new ZEVs to match the variety of consumer needs, lifestyles, and price points. Suffice it to say, the challenge will continue to be in meeting demand and that means dealership staff — from sales to the service bay, need to stay attuned to the latest developments and innovation associated with ZEVs. For many dealerships, this requires an investment in comprehensive, recurring, and up-to-date training initiatives that empower staff to have the answers that customers will inevitably seek answers to.

There is no reason to expect that the present rollercoaster ride we have been on will subside anytime soon — but we can all agree a smoother ride, and one that gives our sector and consumer greater certainty, and predictability would be a welcome change.

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The windy, turbulent evolution of driver-assist technology

Since its inception well over 100 years ago, the automobile industry has been an innovation leader.

From the steam engine to the internal combustion engine to the automatic transmission, innovation drove the sector to new heights with each passing decade.

From the early years, the automotive industry recognized the crucial role that safety features like anti-lock brakes, seat belts and air bags played in saving lives.

Today, much of the conversation has turned to driver-assist technology, which is standard in many new vehicles. However, you may not realize how many different components are helping you to be a safe, confident driver.

Adaptive cruise control (ACC) is one big component. It’s an advanced cruise control system that keeps a vehicle a safe distance behind others and within the speed limit.  Perhaps the biggest benefit of ACC is that you can relax easier at times knowing you don’t have to constantly press your foot on the gas or brakes.

Lane-assist systems are another component that’s taking the car industry by storm. Some cars like the 2023 Acura TLX have systems that can prevent them from unexpectedly veering into another lane. Other models, like the 2023 Ford Bronco Sport, have systems that constantly keep them centered in their lane.

Parking has become a breeze with parking assist systems through which sensors beep or flash when driving too close to another parked vehicle, while panoramic rear-view cameras help the driver see what’s behind their vehicle.

Other parking systems — including Nissan’s ProPILOT Park — are gradually making their way into vehicles. With the push of a button, these systems take control of vehicles and reverse or parallel park them. Some systems in cars like the Ford Fiesta and Kia EV 6 can take this a step further by driving them in and out of spaces while you’re standing outside.

Undoubtedly, driver-assist technology is developing at a rapid pace. But it’s still a far way off from being able to completely drive vehicles.  Changing weather conditions, heavy traffic, small objects, construction zones and other things still pose challenges for this technology.

As such, drivers must still stay focused on the road and maintain control of their vehicles.

Equally as challenging, consumer confidence is a barrier to developing driver-assist technology. Some drivers are reluctant to use it out of fear it won’t work, putting themselves or others at risk.

Others simply enjoy the traditional hands-on driving experience and don’t want it any other way.

In the decades to come, autonomous cars may become a reality on our roadways and have the power to transform our society for the better. Many Canadians with disabilities or mobility issues would be able to travel places themselves and live more independent lives.

The technology promises fewer accidents and better fuel savings as vehicles would travel at more consistent speeds. It’s important to note that driverless vehicles are not allowed in BC and drivers in the province are responsible for every action of their vehicle.

There will be twists, turns and even a few potholes along the road to autonomous vehicles, but safety will always remain paramount as it has been in the long and storied history of the automotive industry.

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Exploring the tools available to a dealership are key aspects of retaining customers

As we make our way through the early months of 2023, the new automobile sector continues to face significant challenges—that primarily come in the form of supply chain issues, a resulting lack of inventory, and pricing, at the same time we are experiencing a slowing economy.

To the frustration of many consumers and dealers, inventory remains a serious challenge as we head into the peak car-buying periods of the spring and summer.

From a price standpoint, while vehicle prices have historically increased by about 2.5 per cent per year, that figure doubled to five per cent in 2022—in part, an aspect of supply and demand, but the increasing price of auto parts has also been a critical factor. Unfortunately, as in the case of many other consumer goods and products, these additional costs are passed onto the consumer.

Another serious issue impacting consumer spending is the present economic outlook and skyrocketing interest rates that have increased borrowing costs and impacted spending decisions. Most analysts predict the economy will continue to decline this year and slowly rebound early in 2024. While this scenario would impact auto sales for the rest of 2023, if there is a silver lining, it would allow vehicle inventories and delivery times to normalize during the same period.

So, how are dealerships working to retain or win over new customers in this challenging auto market? It starts with managing expectations and being realistic about new car inventory. It means ensuring that we are helping a customer identify the vehicle that best meets their needs and lifestyle and educating them about the benefits of the latest innovation or technology.

Exploring the tools available to a dealership are key aspects of retaining customers and attracting new or potential buyers.

One critical aspect is having a strong presence on the three social media giants: Facebook, Instagram, and Twitter. Instagram is great for posting photos of your new vehicles or staff at automotive events. Facebook is a great place to promote your website, ask your followers questions, and share positive user-generated content about your business. Twitter is ideal if you’re posting concise content, including changes to your operations or a link to your latest automotive blog post.

Posting on a regular basis will enhance a dealership’s exposure without bombarding users with excess information. And of course, there are other tools such as CARFAX, which is accessible on a variety of devices, and allows consumers to browse inventory while also establishing a baseline value of their current vehicle.

Another aspect is a user-friendly and visually appealing website. It should be easily navigable on all devices, including tablets, computers and phones. The text should be easy to read and the images should be high quality and load fast. At the top of the main page, have a vehicle search engine that filters vehicles by year, make, and price. Just below it, have photos of and webpage links to your best-selling vehicles.

From a content standpoint, ensure your vehicle information, hours of operation and contact information is up to date. Finally, with the seamless click of a button, users should be able to contact your business or find it on a map.

And because reputation is everything, manage your online reviews, which are typically posted on Facebook, Yelp and Google. While it’s reassuring to get great reviews, inevitably you’ll get some negative ones too. Address these immediately to show your business is responsive and trustworthy with a courteous and thoughtful response. Have a clear understanding of how or if you can address the concern and try resolving it “offline” when possible.

It is often said that with every challenge comes an opportunity. The past two years have presented some significant challenges—but just as our sector has evolved to face every previous challenge, there is every reason to believe we will navigate through our current challenges and come out more resilient.

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Report on state of zero emission vehicle sales lacks context

The New Car Dealers Association of BC (NCDA) seriously considers research that may help illustrate or inform the significant challenges the sector has faced over the last two years. These challenges have had a significant impact on the ability of dealers to meet new vehicle demand.

Dunsky Energy and climate advisors recently released a study that was commissioned by Transport Canada and provides a snapshot of Zero Emission Vehicle (ZEV) availability at automotive dealerships across Canada, captured in March 2022. And while many of the facts are not a revelation, providing some level of context would have been helpful in telling the story that exists, beyond the data. 

It is important to note at the outset that the reporting period for this report covers a very difficult time frame in the market for the auto sector and consumers, as supply chain issues were at their peak, and new vehicle inventory, of all model types, was very limited.

The report highlights that in March 2022, 82 per cent of dealers did not have ZEVs in stock. While that is correct, in fact, during this period, most dealers had no inventory at all—not just ZEVs. 

Irrespective of the market composition and consumer preference, the report includes dealers from cities and towns where almost 100 per cent of the new vehicle market consists of pickup trucks. However, in March of 2022, no ZEV pickups had been introduced to the market. So, context suggesting dealers didn’t have access to this vehicle type is absent. 

The report’s authors also suggest that “the lack of availability of ZEVs continues to be a challenge across Canada and raises questions about whether ZEV sales in Canada would be higher if these vehicles were more readily available.” Speaking from the perspective of British Columbia dealers, it is safe to suggest that ZEV sales would be higher if there was greater inventory. With all due respect to the study’s authors, this is a rather obvious conclusion. 

There is no question that new vehicle inventory continues to be a challenge, but we expect those challenges will start to subside through 2023 and into 2024. In BC, establishing greater inventory for dealers will be important if this province is to remain on pace to meet ambitious targets that require 90 per cent of all new light-duty vehicle sales in the province be ZEVs by 2030—and an ultimate goal of 100 per cent by 2035, mirroring the federal target.

Buying a new car is an exciting time, and consumers obviously want the transaction to occur as quickly as possible. Our dealers are as frustrated as consumers, but both will require patience as the industry gradually returns to some level of normalcy. 

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VinFast VF 8 display at the LA Auto Show, Los Angeles Convention Center in November, 2022.

Despite continuing challenges, there are encouraging indicators for the coming year

As we move into the initial months of 2023, the auto sector continues to face significant supply chain issues which, in turn, have impacted inventory on many new car dealers’ lots across the country. Despite these challenges, we are buoyed with a sense of optimism about the year ahead. 

How 2023 unfolds will be largely dependent on whether or to what extent lingering difficulties subside, but there are trends that we can expect to continue and emerge—both from an OEM and dealership perspective—that will shape our sector over the next several months.

Zero-emission vehicle (ZEV) adoption has continued to gain a stronger share of the light vehicle market in recent years, particularly in provinces such as British Columbia where the NCDA is honoured to administer the CleanBC Go Electric Rebate Program on behalf of the province. During the first eight months of 2022, more than 10,000 rebate applications were submitted by consumers in this province and the ZEV share of the light vehicle market reached 14.6 per cent. Today, there are more than 80,000 zero emission vehicles on BC highways. 

This positive trend will continue and as supply chain issues subside, we fully anticipate there will be a corresponding surge in ZEV sales, especially in electric pickup trucks, which are the preferred mode of transportation for many British Columbians, and a requirement for many who may live or work in resource communities.

To meet ambitious zero emission vehicle targets at the federal and provincial level, automakers will need to address sustainability in their supply chains and business operations now and in the future. The experiences of the past few years have demonstrated the need for automakers to monitor and trace every aspect of their supply chains, from materials sourcing to manufacturing to recycling.

As automakers continue to integrate more digital technology into their vehicles, there is increasing competition to develop software and digital and electronic operating systems to power and control new, innovative zero-emission vehicles. Drivers increasingly want a safe, comfortable, and convenient multimedia experience and there will be continuing pressure to deliver.

As vehicle supply continues to recover, consumers will have more choice, which could mean more competition. Dealerships will continue to place a focus on what sets them apart in the market, which means increasingly providing a seamless experience for consumers whether they shop online, in-store or both. Central to this priority will be the development of skills and capabilities through strategic partnerships or in-house talent—to build and maintain technologies that offer seamless experiences.

The past three years have been bumpy for the automobile sector and it’s safe to suggest, if there’s one collective wish we all share, it’s for a smoother ride in the months ahead.

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How the industry must learn to adapt to the world, post-pandemic

In many respects, our industry has experienced Groundhog Day for the past three years —with one challenge after another—collectively impacting our ability to meet customer demand for new vehicle products.

Many analysts now anticipate the sector will catch up to pre-pandemic levels at some point in 2023. When some level of normalcy does return, it will be interesting to see which of the many aspects of change that have occurred during this challenging period are here to stay—and how we, as a sector, adapt to and adopt changes that reflect a new reality.

For example, ongoing inventory shortages have made consumers more receptive to pre-orders. As a result, dealers are selling more product sight-unseen than ever before. Pre-orders result in many skipped steps in a traditional car-buying journey, such as test-driving, price haggling, and discount offers.

Customer interest for online services has never been greater. Accommodating these evolving demands will require strategic adjustments that may involve an online-friendly showroom layout, revamped website, online test drives and service bookings, and mobile apps. But a careful balance is going to be required to also continue accommodating in-person buying, because many customers continue to prefer purchasing a vehicle on site.

Accommodating these evolving demands will require strategic adjustments that may involve an online-friendly showroom layout, revamped website, online test drives and service bookings, and mobile apps.

New vehicle shortages have increased pre-owned sales because many customers have found that immediately buying a used car is more practical than waiting weeks—if not months—for pre-orders to arrive. In the short term, dealers have more opportunities than ever to make more money per deal on both the front and back ends. However, this opportunity might only last for so long, without an influx of new vehicles for which consumers can trade their current ones.

Despite challenges associated with meeting demand, the surge in interest for zero emission vehicles has never been stronger—and is increasing at a rapid pace. As this occurs, it is altering the traditional auto industry and has far-reaching implications for dealers, affecting almost every element of their operations. Those considerations include additional training for maintenance employees to safely service high-voltage powertrain systems, training for front-line sales staff to answer consumer questions competently, and finding alternative cash flow opportunities to replace the lost fixed-ops revenue due to fewer EV service appointments.

As an industry, we also need to recognize that dealerships face greater competition than ever before from new online sales providers, so it’s incumbent that dealers devise new strategies to address these challenges.

The success of any dealership depends on its people—and recruitment and retention issues are only going to become more challenging. This is due to the number of employees who are projected to retire over the next decade, and because of the new and challenging requirements for those who are service technicians, for example.

This means we need to make our sector a desirable workforce for all, and we need to find ways to innovate, and ensure employees are constantly challenged and rewarded. As millennials gain traction in the job market, new retention challenges emerge, including the tendency to stay at the same job for short periods of time compared to previous generations, and a preference for online interactions over personal ones, to name just two.

While challenges will always exist in the auto market, staying on top of trends and educating your employees for a fast-changing market can help secure a dealer’s health in a constantly changing environment.

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Every level of government faces the difficult challenge of finding the resources required to fund the many needs and wants that society demands of them. However, governments must always be mindful that there is only one taxpayer. They don’t differentiate between federal, provincial, or municipal levy. A tax is a tax.

That is why the prospect of two levels of government doubling down on a vehicle luxury tax is so frustrating.

The BC luxury tax on vehicles kicks in at a $55,000 price—but hasn’t been adjusted for inflation for many years. As a result, many standard vehicles of today are captured by the tax, including vans and larger SUVs that families rely on to shuttle their children around—in addition to pickup trucks that are required by many businesses, and individuals, including those who live and work in resource communities. 

In a recent provincial pre-budget submission, our provincial association recommended the luxury tax threshold be raised and then eliminated over time to reflect the fact that the average price of a new vehicle in Canada reached $54,000 in May, only slightly below the present luxury tax threshold.

The concern is further compounded by the pending introduction of a federal luxury tax in September that will create a double-tax for consumers in this province.

The federal government plans on establishing a new 10 per cent luxury tax on vehicles over $100,000

The federal government plans on establishing a new 10 per cent luxury tax on vehicles over $100,000 and while some may say, people who can afford a vehicle in his price range can afford an additional tax, it should be known that the implications are significant for car dealers in this province who are still trying to manage their way through supply chain issues. Additional taxation in a highly competitive sector like ours is always a concern, as consumers in BC can simply go to other neighbouring jurisdictions with more favourable tax structures for their purchases—putting BC companies and family-supporting jobs at risk. 

What amounts to tax-on-tax for new car dealers will provide an even greater incentive for consumers to take their business elsewhere, greatly impacting the more than 400 new car dealerships in 55 communities across this province, generating $15.6 billion in economic activity, and 27,000 family supporting jobs.

Our federal association has made the case to Ottawa that the impact of applying a federal luxury tax on top of the provincial tax in this province will have a significant impact on British Columbians who already face considerable cost of living challenges, and negatively impact sales of new vehicles. 

We trusted the federal government might be influenced by a May 26 report by the Parliamentary Budget Officer (PBO) suggesting the new tax on luxury vehicles would add $572 million to government coffers through the 2026-27 budget year but reduce sales by $566 million, or 19 per cent, over the same time span.

Unfortunately, at this time those discussions have gone nowhere, and we continue to ask, is there anybody listening?

The post There is only one taxpayer, why two luxury vehicle taxes? appeared first on Canadian Auto Dealer.

Ongoing challenges require careful communication with consumers 

Whether you’re a salesperson, sales manager, or general manager, working at a dealership has many challenges that have become common over the past two years. In some respects, it may seem like Groundhog Day, as a semi-conductor shortage and supply chain issues have resulted in a lack of inventory and created unprecedented consumer demand that most dealers simply aren’t able to meet.

Depending on the strategies of the manufacturer, supply chain issues have played out either through reduced manufacturing, fewer vehicle-options available or stockpiling of semi-built vehicles with plans to retrofit the shells later. Nearly two years into the global chip shortage, many analysts suggest the return to normalcy for manufacturers’ supply chains is projected no earlier than 2023.

Where many new dealers are used to 200, or more, cars on their lots, in many cases, it has been reduced to a fraction of that total. This means dealerships have had to adapt and learn to sell cars that don’t yet exist, while customers face the reality that they may not see their new vehicle for an extended period. 

Where manufacturers have historically communicated on issues such as allocation, distribution, and production, managing the gulf that exists between customer needs and available options is now falling squarely on dealers.

While there are examples of dealerships discontinuing or reducing their marketing and social efforts during this difficult period, it’s important to do the opposite. Various research has shown that most vehicle buyers are aware of the ongoing challenges, so don’t duck the topic. 

Instead, use this period as an opportunity to build trust with buyers through proactive and personalized communication related to ongoing shortages. Open communication with customers and helping to manage expectations is crucial. 

From start to finish, your customers should be well versed in how your team has handled inventory shortages and what opportunities may exist to easily purchase a vehicle that meets their unique wants and needs. 

From start to finish, your customers should be well versed in how your team has handled inventory shortages and what opportunities may exist to easily purchase a vehicle that meets their unique wants and needs. 

Now is the time to stand out from other dealerships, by continuing to be active on social media, emphasizing your customer service practices, offering customers great service and ensuring all their interactions with your dealership are convenient and easy. 

Internally, this means putting processes in place that allows you to set realistic expectations while ensuring your entire dealership is on the same page when communicating with customers. This includes communicating with customers seeking out-of-stock units or the status of vehicle deliveries, or details on pre-ordering new models. 

Ensure to update any external touch points, such as your dealership’s website. Consider creating an easy-to-access information center that speaks to frequently asked questions such as whether your dealership is selling inbound units or allowing your customers to place specific orders while they wait. 

It is no secret that there will be a significant ramp-up in electric vehicle production as these challenges ease. Governments around the world have mandated either improved fuel efficiency or zero emissions, and legislation and budgets are preparing the public spaces for charging stations or wireless charging.

There is a light at the end of the tunnel, and when that occurs, you want to be in the best position for success—and that means having a loyal customer base staying with you.

The post Communicate, communicate, communicate appeared first on Canadian Auto Dealer.

Honest and timely communication with consumers is necessary in the face of current inventory challenges

There is no doubt that new car dealers in every region of the country continue to experience significant challenges as a result of the pandemic, and the associated semiconductor shortage and supply chain issues.

For our sector, these issues have been problematic on many levels. After all, as consumers turn their attention to the prospect of a new vehicle, the vast majority will visit a new car dealer lot with the intention of viewing the latest models, new technologies and features.

While many consumers may be aware of the semiconductor shortage and other supply chain challenges and their impact on the new vehicle market, that doesn’t necessarily mean they will be more understanding when it comes to limited availability and longer wait times involved with ordering a new vehicle.

So, in the face of these inventory shortages, how are we best to collectively address this particular challenge? Certainly not by burying our heads in the sand until this period of uncertainty passes. Rather, it’s by upping our game and developing an effective communication strategy that is reflective of your brand promise—to help to build trust with buyers, through proactive and personalized information.

A critical aspect of such a plan is an honest assessment of the situation, so you can communicate with customers in a manner that is realistic and creates a level of predictability.

As we continue to endure inventory shortages, other important aspects of your strategy should be focused on addressing the current needs of customers. In many cases, a dealer’s business development centre is serving as a form of ongoing customer concierge—identifying customers who will likely need service soon and then delivering personalized messaging at the right time to entice customers to act.

It’s also critical that dealers identify prospective buyers before they return to the market by engaging them about the prospect of tailored offers and financial deals that may speak to the buyer’s unique situation before they go price shopping.

Every dealer across the country has their usual set of touchpoints they typically leverage to contact customers. Whether it is regular emails, SMS text campaigns or something more old school, your customers expect to hear from you in certain ways.

The key element of success here is communicating with a personal touch, engaging customers in a manner that addresses their unique needs.

Especially important is capturing customer feedback following a dealership visit for sales or service—dealers that have fine-tuned a strategy to deliver excellent customer reviews to their Google business, Facebook, website listings and more can stand out from the crowd, helping win new customers by positively influencing word-of-mouth.

The present situation is by no means ideal for dealers or consumers. Buying a new car should be an exciting time for consumers, and the current challenges are frustrating for all involved. Collective patience and thoughtful engagement will be key, until we return to some level of normal.

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