U.S. consumer demand for new vehicles is easing, and the effects are being felt in dealerships across the country. As the demand for new cars decreases, manufacturers are leaning on sales to rental car agencies and other bulk buyers to make up the difference.
But there are potential longer-term implications for dealerships in areas we have frequently discussed in this blog. Slowing sales will almost certainly impact dealership profitability, although to different degrees based on manufacturers represented and actions taken to improve profitability. Also, dealership valuations may dip, depending on expectations for the market in the near and longer terms.
For manufacturer-specific figures and trends, access this great Wall Street Journal article. (If the link takes you to a subscriber wall, you can access the article by searching for the headline “U.S. Auto Sales Slumped in May” on Google.)
If you would like to discuss these implications and others, or if you would like to learn how to keep more of your cash in your dealership, contact Sam Agresti, Brady Ware’s Dealership Advisors Team Leader, at email@example.com or 614.384.8410.