Looking back at the previous decade, there has been much change. But there are also numerous opportunities for dealers in the decade ahead, if they know where to look, and how to adapt to these changes.
Looking back, the 2010s started off on a low note — a hangover from the 2008-2009 financial crisis. Approximately 200 General Motors of Canada dealers closed their showrooms for good. Financial markets had to be reinvented. A devastating earthquake struck Haiti, killing 160,000 residents. Toyota had a massive recall, and a devastating U.S. oil spill occurred off the shores of Southern California and Mexico.
The second decade of the 21st century was chock full of events to remember — and yes, some to forget. Natural disasters dominated the news for much of the decade. An earthquake triggered a tsunami that struck Japan in 2011, damaging much of the infrastructure (including some automotive assembly facilities). Osama Bin Laden was killed. Occupy protesters demonstrated against income disparity, corporate greed, and social inequity. And Steve Jobs lost his battle with pancreatic cancer.
The populist movement is now reshaping our social fabric, and right before our eyes. Faith in the political process has never been lower, and belief in the old standards is being challenged in every walk of life around the world.
After a slow start, car dealers turned out quite strong within the last decade. New vehicle sales per dealer increased, as did dealership revenues, profits and values. We now talk about a 1.9 million normal market from 1.5 million just 10 years ago. F&I became an important profit centre.
Costs, however, continued to rise as labour rates, facility costs, and vehicle quality improvements all worked against us. Our service lanes benefited from an increasing number of vehicle recalls that allowed us to rev-up fixed operations and see a greater number of customers. For some dealers and brands, it was a decade of highs and lows in our service bays.
Unfortunately, the dealer body has not been able to increase market share of the total vehicle service pie. But this next decade presents dealers with an opportunity to increase overall vehicle maintenance market share.
As the previous decade came to a close, both concern and opportunity about the future were at heightened levels. Brands, as we know, are in transition as they reinvent their product offerings, attempting to capture customers’ imaginations and appeal to their personal values, while also holding current product offerings on a steady upward course. New competitors are surfacing that appear nimbler and more creative in the eyes of the consumer.
Some of this is driven by fake news and some by very early days’ success, which might or might not prove sustainable in the longer-term. It’s a time for all brands to reevaluate their modus operandi and step up their game to preserve their historical positioning into the future. Some will enjoy success and others might not. Much great work has already been done. For some brands, a new foundation has been a work-in-progress and is on the road to completion, for the time being anyway.
In my mind, the excitement surrounding the future and the next chapter in the automotive story far outweighs the apparent lethargy created by legacy. However, at this time, not everyone is on the same page or sharing the same vision. That is the hard reality that our industry just simply has to work though. While it does, negativity will dominate the news and experiments will happen. Foes will turn into allies, as new significant ties will be formed both for strategic and survival purposes. Our brands will get through this and excel.
As dealers we are and will continue to be the local market representatives for the brands we represent. As our brands shift gears, governments interfere, labour unrest continues, and the global environment drives us all to a bigger collective focus, dealers will do their part, as we always have.
Yes, much is out of our control, but on the other hand, much more remains in our control. Drawing an analogy from sports, the front office can do its thing — but it’s what happens on the playing surface that matters. Dealers have always lived on the playing surface and will continue to do so.
Driving into the future is not for the faint of heart. Many of the old reliable facts can no longer be relied upon. New ones are emerging that will require us to adapt over this next decade. We will work differently, largely through a prolonged period of uncertainty. We must keep customers happy throughout, since at the end of the day they pay the bills that keeps the whole industry running. In this next stage, we must be totally aligned with brands. Us supporting them and them supporting us, and both of us supporting the customers.
I believe our market will shift gradually over the next decade in our favour. Electric vehicles will keep the automotive industry at the forefront of innovation and creativity. Climate change is real and will act as the catalyst that accelerates market initiatives. As I said, some brands will excel while others will not. Consumers have always held the balance of power.
Driving into the 2020s, we will see the continued rapid acceptance and demand for new technologies. Vehicles are not exempted and I don’t think that we want them to be exempted. The world belongs to those businesses that can quickly and genuinely adapt to rapid change in a controlled and sustainable pace. We all will be connected, opening up a new host of opportunities as we move forward with cautious optimism.
As the new year emerges and a new decade rises, we have almost 30 million vehicles on our roads that must be looked after. This is our bread and butter. Units In Operation will steadily increase as Canada’s population continues to grow. The move to electric will be slow and steady giving us the opportunity and time to service the present customers we have and the ones waiting to be our customers.
As dealers, we always invest in the latest technologies to better service vehicles and our customers that drive them. Over the next decade, I believe that dealers will continue to invest, continue to improve, and in the end be an important part of the solution. It will not be easy, nor inexpensive, but for the current dealers that choose to continue on the journey, I believe it will be highly rewarding.
As the industry shifts gears gradually over the next decade, we have a tremendous opportunity — particularly in used vehicles and fixed operations. This should be significant. Collectively, if we expand our market share, financial rewards will come.
Yes, we will be challenged by human resource issues. I believe we are in the process of changing that narrative and elevating employee value within our businesses and creating meaningful long-term employment and investment opportunities. Many buttons are being pushed today that will set the new standard moving forward. Dealers today are great employers, great community supporters, and dealerships are great places to work. Dealers today can offer challenging careers that can excite and stimulate a pool of future workers.
Looking back, I can honestly say for dealers, it’s been a great decade — all things considered.
Looking out into the future, I see so many positive signs and opportunity for our new decade. I believe the 2020s will develop into one of the most exciting and important times since Henry Ford set us on this journey over 120 years ago.
All we have to do is enjoy the ride, keep our eyes and ears open, work hard, and work together to make the 2020s a decade to remember.
