Why Dealerships Are Changing Their Sales Models

Why Dealerships Are Changing Their Sales Models And How It Affects Repair Shops

As consumer expectations and preferences evolve so do manufacturers across all industries, and the automotive industry is no different. Ten years ago, customers visited dealerships about seven times per purchase, now it is around 1.5. This steady decline in dealership visitation has become more prevalent with the rise of online marketing, digital experiences, and e-commerce. More than 80% of consumers say that they would like fixed-pricing and a buying process as simple as that of e-commerce. This trend has been fueled by the pandemic.

The Agency Model

This is where the Agency Model comes in. In this new sales model, dealerships become ‘agents’ who act on behalf of manufacturers. Manufacturers will be able to make direct sales.

Under this model, the manufacturer becomes the retailer while the dealer remains the physical touchpoint with the customer.

How Does This Affect Your Shop?

It is foretold that there will most likely be a decrease in new car sales. made by dealerships and that they will start expanding and specializing in used car sales. Even now, used car sales continue to increase as more people are opting to buy them due to chip shortages. With more used cars on the roads, auto-shops will see more demand for repairs and maintenance. 

As many of us well know, the smallest change in the paradigm can have far-reaching effects. We need to keep our fingers on the pulse of the industry so that we can detect these changes as soon as possible. Follow the TVP Newsletter in order to do just this.