Big dealers see the future of car sales as being great for them. Profit margins will continue to be high, and they will continue making money, even with the current shortage of computer chips and components. The National Automobile Dealers Associate has found that the average dealership earned a whopping $2.1 million dollars of pretax profit in the last year. This is a substantial increase, especially considering all the issues that manufactures are having.
Soaring prices will not be the only aspect of the car industry that you will have to look forward to. The pandemic has already disrupted the whole sector. Many car dealers had to get lifelines in the form of working capital business loans or bailout packages from P2P lenders just to stay afloat through the worst of the COVID-19 lockdowns. Consequently, this has prompted all the big vehicle makers to push forward on plans that they have had in the works for the past couple of years.
- Online-The car industry is following the lead of the rest of the nation’s industries. Online sales are increasing, while in-person numbers are dropping. You can now search for vehicles from your laptop or phone. Dealerships are now making use of specialist automotive website providers like Autoweb and others to build their online presence and sell more cars. You can see the entire car on such websites through pictures and videos. You can hear the motor start and run. Dealerships used car lots, and even private sellers are switching to this form of selling. Platforms have also been formed that allow you to get any car that you want delivered to your door, without you ever having to leave the house. These vehicles will also be covered, for a set amount of time, in case you do not like the car or truck.
- Electric-The push for electric cars has been sped up due to the pandemic that has crashed through the world. Electric cars will decrease the need for gasoline and diesel vehicles. This will increase the demand for them because the supply will go down. Electric cars will start flooding the market soon, and the shift will cause a nationwide shortage due to the fact that there is currently a global shortage of computer components. This push will affect used cars near me in a negative way. People will opt for electric models and will pass on the chance of getting a good deal on a used gasoline car.
- Orders-Big manufacturers have learned, during the pandemic, that if they have fewer cars on the lots, they can charge higher prices. This will be the future of car purchasing. Big companies will take orders for vehicles from dealerships, or customers. This allows the manufacturing companies the leisure of reducing the production line processes. This benefits them because they are dealing with a shortage of workers.
- Availability-As mentioned earlier, car lots will have fewer vehicles on the lot. If the consumer wants a vehicle that is not on the lot, they will have to use order forms and have it specially built. This will allow prices to remain high, and even increase further. This, of course, will increase the demand for used cars. Since people are holding on to their current cars now, the supply of used cars will also decrease. This is a typical cycle of supply and demand, but the future holds the probability of supply being far less than the demand will be.
- Future for Dealers-Some dealerships will be sold off by the current owners. Others will be turned into service centers and will stop sales altogether. Umbrella companies, meaning the largest of the large, will start overseeing all the manufacturing and sales. The dealers that want to succeed will join forces with them, while the ones that do not convert for the future will slowly disappear. However, it must be said that having a physical location for your dealership can always be useful to the customers. Future car buyers would also be interested in examining the vehicle physically, go for a test drive, and be sure of the vehicle being purchased, so there could be sustained demand for physical dealerships.
The future for the car industry looks great for some, and bleak for others. Used car lots will increase in number as the demand increase. Private sellers will start buying wrecked cars and flip them after they have been fixed. Supply will take time to catch up with the demand, but it will eventually level off. Prices, however, will stay high and continue to rise.