BVM August, 2016 - page 33

Business View Magazine - August 2016 33
“A top industry priority should involve encouraging
and creating high-performing auto dealerships,” said
Knupfer. “Our research busts the myth that most of
the factors that effectively drive dealer success, such
as sufficient scale and brand strength, remain beyond
the industry’s control. Instead, we discovered that in-
ternal operating practices differentiate highly-profit-
able retailers from their peers today even more than in
2006 when NADA and McKinsey conducted a similar
The research shows that while dealerships are still the
preferred place for making the final buying decision,
today’s car shoppers are spending more time online
on dealer and third-party websites to kick the digital
tires of cars and light trucks. Simultaneously, new play-
ers with other business models are entering the retail-
auto space with an eye toward profiting from sales and
service revenue.
“More than 16.4 million new cars and light trucks were
sold last year, but this recovery in sales has not trans-
lated to consistently increasing profits,” said Mathis.
“While profits have risen from post-recession lows,
they have plateaued over the last two years and have
failed to keep pace with growing volumes.”
“To attract and retain today’s digital car buyers, deal-
ers and automakers need to collaborate more to
achieve better returns on their marketing dollars,”
said Michael Regan, NADA vice president of industry
affairs, in separate remarks at the Automotive Forum,
which is hosted by the Greater New York International
Auto Show.
Steven Szakaly, NADA chief economist, added: “While
dealership profits are under attack from multiple
fronts, such as Internet-based third parties and the hy-
per-competitive nature of auto retailing, this study pro-
John Grau,
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