Schneider Downs was represented again at the 2015 National Auto Dealer Association Convention held recently in San Francisco. Attendance was estimated to be 40,000. What an impressive event! We are fortunate to have the opportunity to work with such an exciting and impactful industry.
I spent the first day of the convention at the J.D. Power Automotive Summit: “Franchise of the Future.” Of particular interest was a roundtable of industry analysts who presented the results of their compilations of franchise measures of performance by:
Mid and Lower Volume
Each franchise was evaluated for the following fundamentals: vehicle quality; vehicle appeal; customer relations; reputation; retail gross margin and retained value. In addition, the customer trading patterns of each franchise were evaluated, which suggested where a particular franchise gained or lost customers. Finally, the analysts forecasted the outlook for each franchise.
The balance of the day included presentations regarding the U.S. Market Outlook, Future Customers and Their Needs, Drivers of Today’s Dealership Buy/Sell and The Future of the Buy/Sell Market, concluding with auto industry leaders forecast of 2015. Some highlights:
- The auto industry is in a “hot zone” with 2014 marking the fifth consecutive year of sales increases for only the second time in 80 years;
- The rising economy expected in 2015 will support rising auto sales growth, although at a lower and more sustainable rate;
- The average age of autos on the road today is an incredible 11 years, and auto interest rates are at historic lows;
- Industry-wide sales for 2015 are expected to be between 16.6 and 16.8 million new vehicles;
- In 1988, women bought 40% of new vehicles. Today (2014), women account for 62% of new car sales;
- There are more than 80 million in the millennial generation, making them the largest consumer group;
- In 2015, millennials purchased 26% of new cars sold, and by 2020 that is expected to reach 40% of new car volume;
- 95% of millennials shop for vehicles online and spend approximately 18 hours doing research; and
- To respond to these and other changing dynamics, dealers must cultivate and maintain long-term customer relationships, engaging in direct, honest and transparent buying experiences in clean, state-of-the-art facilities.
All good stuff, indeed, and reinforcing the influences we as the Schneider Downs Auto Team see our clients responding to.