Nearly 200 car dealerships changed hands in 2017, with the same number of ownership changes expected this year.
What’s this mean? According to The Wall Street Journal, the nation’s 16,800 car dealerships are consolidating … and getting larger. The top 50 dealer groups are poised to book more than $175 billion in revenue this year, compared to $144 billion just four years ago.
According to the Journal, “…dealer margins are shrinking amid tough competition and the increased pricing transparency enabled by the Internet. Dealers took home about 2.5% of the selling price of the average new car in 2017, down from about 4.7% in 2009, according to data from the National Automobile Dealers Association; used-car margins slipped to 6.9% from 10.7% in 2009 during that period.”
Many analysts predict declining car ownership in the future as Americans choose not to own a car due to fleets of hailable cars. And at least one dealership group is considering a subscription service, charging a flat monthly fee in exchange for access to a variety of vehicles. (If you haven’t considered subscriptions for your members, you should. See this post.)
You may not work for an automobile dealers association but it’s likely you can come up with just as many challenges facing your members, your industry and your association. That’s the first step toward innovation: identifying the threats and pain and articulating what they mean both now and in the future. The answers aren’t always obvious or easy, but I’d rather actively seek them than pretend they don’t exist. The latter option is a sure step toward irrelevance.