The auto industry is changing, and those changes are coming quickly. As a busy and profitable sector, it is one that is also very reliant on the function and use of financing. Currently, car financing is a prevalent way of buying a new or used car, and whether it’s a vehicle for personal use or a company acquisition that will be used primarily for work, car dealerships are racing to keep up with the tech and trend changes. When an estimated $500 billion is used for financing every year, dealerships need to ensure that they can tap into that lucrative revenue, while providing the quality service that the modern consumer expects.
The automobile industry is set to face some all-encompassing changes in the near future. Both social changes and the future of cars themselves are being addressed, and they could mean that financing is going to change as much as the automotive industry itself is expected to. It is presumed that as automation continues to move forward, consumers may end up paying less for their cars, and that will mean that financing too will drop. This is primarily due to the expectation of car-sharing, and and the potential drop in auto sales around the world. As this occurs, it will need to be reflected in the options for financing that a car dealership will offer.
If less individual consumers are investing money into cars, then car dealerships will have to refocus their target audience. It is expected that businesses will become the next significant demographic that will need to be targeted, and your car dealership will need to offer B2B financing options that reflect this change.
Meeting the Challenge
The most forward-thinking car dealerships are already addressing this potential challenge. Just as technology is promising to change the way that we look at travel forever, it is also being used to tackle the expected difficulties. Digital technology is key. Integrating modern tech into your sales process can help you prioritize consumer satisfaction, and that is now the key to business growth.
As the industry faces threats from so many directions, being able to offer a more personalized service is going to be key, even if the majority of your future clients are expected to be corporations rather than individuals.
Tablets that can be used as product guides, software that can tackle your sales figures and identify weak areas, VR for improved consumer/product interactions, and hardware that makes it easier to source financing for a business acquisition, are all being used to keep car dealerships one step ahead of the tech revolution that seems so industry disruptive.
The automobile industry is being forced to evolve in a way that it hasn’t had to since Henry Ford established his first production line. Car dealerships that fail to keep up will have problems.
Just as the internet has allowed consumers to look for the perfect car, it has also given them access to their own methods of financing. Technology can be used to your advantage here, as you will be able to tailor your marketing to reflect that consumer preference. Look at your financing acceptance rates and use that ratio as a marketing tool, and use blog posts to show your level of financing expertise, highlighting the ease of financing a business acquisition or personal purchase.
All car dealerships will have their established financing channels. These will need to be looked at more closely. While most car dealerships will have been prioritizing the financing options for private individuals, those dealerships and the finance companies are going to need to refocus. If your financing company is not adding to its menu of options available for corporate clients, then you may need to transfer to a new provider. Make no mistake, the future of the car is uncertain, and only by keeping one step ahead of the changes will you able to continue running a profitable business. Not only will car dealerships need to have a fresh look at their products and start tailoring what they keep on the lot so that their offerings are more suitable for business use, but they will also have to make sure that they have the financing options to match. A corporation is going to require a very different standard when it comes to financing a business acquisition.
The Future of the Car
There are some serious threats to the car industry. Cars that drive themselves are already here, and how quickly the mainstream consumer market adopts them is going to dictate how quickly car dealerships will need to change.
In the best case scenario, there will be a transition period, but that cannot be relied on.
The potential cost savings for both private buyers and businesses will inevitably lead to a sudden demand. Being able to meet that demand is the goal, and having the right range of financing options is going to be the key. As the transition occurs, no matter how quickly, your car showroom will need to be able to offer more choice when it comes to financing, for both private individuals and those corporations financing a business acquisition. For personal use of business use, no two clients are going to be the same, and your financing will need to be customizable, intuitive, and (of course) profitable for you as well.
One of the factors that is going to have a significant impact on the automobile industry is going to be the rise of the car share. If businesses are building up to be the most common purchasers of cars, then you can expect there to an unavoidable drop in the total numbers of cars owned. This may be an unfounded fear, but it is one that you will need to plan for. If B2B sales are going to be your future priority, then you will need to look for ways to get more from your financing and plan for tighter profit margins.
Whether you think that automation is the industry disruptor it promises to be, or you’re confident that your existing business model will serve its purpose for the foreseeable future, the key takeaway should be choice. Being able to offer more financing options is the key to the future success of your automobile business. Failing to adapt to changing trends and technologies could see your profits drop, and if that takes you by surprise, then you haven’t been doing your research, and your business may never recover.