Top Challenges Dealerships are Facing in 2024

With 2024 in full swing, automotive dealerships are likely to face a variety of challenges, influenced by technological advancements, shifting consumer preferences, regulatory changes, and economic factors. Here are some potential challenges that dealers have been seeing or may expect to see this year:

• Post-Covid Transition: Many dealership teams had it easy during the COVID-19 pandemic (in terms of vehicle sales) and became order takers and now that things are normalizing in the car market, there are a slew of sales people who don’t know how to sell or forgot how to sell.
  
• Economic factors: High interest rates and access to credit/capital may affect some customers’ ability to finance a new vehicle, causing more people to hold onto existing vehicles.
  
• Digital Transformation: The automotive industry continues to undergo digital transformation, with online sales, digital marketing, and virtual showrooms becoming increasingly important. Dealerships need to invest in technology and digital platforms to stay competitive in this evolving landscape. 
• Supply Chain Disruptions: Global supply chain disruptions, whether due to natural disasters, shipping disruptions (ahem, bridge collapses, ships running aground, threats from pirates, etc.), geopolitical tensions, or other factors, can impact the availability of vehicles and parts, leading to inventory shortages and delays in delivery. 
• Consumer Expectations: Consumers expect a seamless and personalized buying experience, both online and in-person. Dealerships need to invest in customer relationship management (CRM) systems, training, and customer service to meet these expectations. 
• Regulatory Changes: Regulatory changes related to emissions standards, safety regulations, and data privacy laws can impact dealership operations and require ongoing compliance efforts. 
• Competition from New Entrants: Traditional automotive dealerships face competition from new entrants such as online car marketplaces (Amazon?!), direct-to-consumer brands (Carvana, etc.), subscription-based car services (car share programs), and on-demand car services (Uber, Lyft, etc.). Dealerships need to differentiate themselves and provide unique value propositions to attract customers. 
• Talent Acquisition and Retention: Recruiting and retaining skilled employees, including sales staff, technicians, and digital marketing specialists, can be a challenge in a competitive labor market. Keeping your team trained and satisfied is essential! 
• Sustainability Initiatives: Increasing consumer awareness and government regulations regarding environmental sustainability may require dealerships to invest in eco-friendly practices and offer more fuel-efficient or electric vehicle options. 
• Rising Costs: Operating costs, including real estate, labor, and marketing expenses, may be on the rise, putting pressure on dealership profitability. 
• Cybersecurity Risks: As dealerships collect and store sensitive customer data, they are vulnerable to cybersecurity threats such as data breaches and ransomware attacks. Implementing robust cybersecurity measures is essential to protect customer information and maintain trust.
• Electric Vehicle (EV) Adoption: With the increasing popularity of electric vehicles, dealerships may face challenges in adapting their inventory, infrastructure, and sales strategies to meet the growing demand for EVs. Plus, sales and service staff especially need to be versed in all the latest technology. 
  

Overall, successful automotive dealerships in 2024 will need to adapt to these challenges by embracing technology, focusing on customer and employee experience, and staying agile in a rapidly evolving industry landscape. And when it comes to training your team, Quantum⁵ is here to help! Contact us to get a demo today.