The rise of the car dealership model has been a boon for the automotive industry. In recent years, stimulus checks and other factors have led to an increase in the number of people buying cars. However, saving money on a car purchase is still a top priority for many consumers. This is where the current car dealership model completely falls apart. With markups affecting a large majority of new vehicles, and supply chain disruptions creating havoc on assembly lines, consumer sentiment has grown less favorable of using a dealership to transact – leaving many people buying their vehicles directly from consumers.

The fall of the car dealership model and its impact on the automotive industry

2023 is shaping up to be a tough year for the automotive industry. Sales have been declining for the past few years, of course supply shortages are to blame, but now the industry is facing an even greater challenge: the failure of the current car dealership model. For years, independent dealerships have been the lifeblood of the automotive industry, selling more than 70% of all new and used vehicles. But increasing numbers of consumers are choosing to buy their vehicles directly from other consumers, bypassing dealerships altogether. At the same time, new car-sharing and ride-hailing services are making it easier than ever for people to get around without owning a car. As a result, dealerships are seeing far less sales, and much less gross due to the adjustments in vehicles values. This will have a ripple effect throughout the economy, putting hundreds of thousands of people out of work and further depressing sales. The fall of the dealership model is just one more challenge the automotive industry will have to face in 2023, beyond the chip shortage.

Why the predicted recession is fueling the failure of car dealerships.

Car dealerships are failing at an alarming rate, with over 700 franchise & independent dealerships shutting their doors in the past year alone. The reason for this is simple: people are buying fewer cars. New car sales have been on the decline for the past several years, and the trend is only expected to continue. The predicted recession is one of the main reasons for this decline. As consumers become more cautious with their spending, they are less likely to make large purchases like cars. In addition, the rise in interest rates is making it more expensive to finance a car purchase. As a result, dealerships are struggling to keep their doors open, and many are forced to declare bankruptcy. While the current economic conditions are certainly challenging for car dealerships, it is important to remember that recessions come and go. By weathering the storm and adapting their business models, dealerships can survive and even thrive in times of economic upheaval.

Why dealers need to be advertising during these times.

Advertising is an important part of any business, but it is especially crucial for dealerships. To succeed, dealerships need to attract customers and build brand awareness. Unfortunately, the COVID-19 pandemic has caused many businesses to cut back on their advertising budgets. However, this is a mistake. Now more than ever, people are turning to the internet to research potential purchases. If dealerships want to stay competitive, they need to make sure that their online presence is strong. This means investing in SEO, pay-per-click advertising, and social media marketing. In addition, it is important to create compelling content that will capture the attention of potential customers. By investing in advertising, dealerships can ensure that they are visible to potential customers and positioned for success.

Where can dealers invest for the future?

As the world changes, so does the automotive industry. Dealers need to be constantly aware of new trends and technologies to stay ahead of the competition. But where should dealers invest their time and money?

There are a few key areas that are worth focusing on. First, it’s important to keep up with changes in the marketplace. This means paying attention to things like new customer segments, shifts in demand, and regulation changes. Second, dealers need to make sure their inventory is up-to-date and reflects the latest trends. This means stocking items that consumers are looking for, such as hybrid and electric vehicles. Finally, it’s important to invest in training and development for employees. This will ensure that they’re able to properly sell the inventory that you floor.

By staying informed and investing in their business, dealers can stay ahead of the curve and position themselves for success in the future.

It’s no secret that the automotive industry is in a time of turmoil. With dealerships failing left and right, it’s more important than ever for those still standing to invest in their advertising. And if you’re looking for a digital marketing agency that’s willing to guarantee customers for your dealership, Arbor Advertising is your ONLY solution. We know how to get people into showrooms – even during a recession – and we’re ready to put our skills to work for you. So don’t wait another day, give us a call and let’s start driving sales at your dealership.

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