How The UAW Strike Impacts Dealerships
A Dealership Consultant Weighs In On The Strike
By Terry Schwer
The UAW Strike, low inventory, high interest rates… it’s always something in the auto industry!
We’re here to help make some sense of all the uncertainty.
When Will The UAW Strike End?
In their fight for increased wages, the United Auto Workers strike is showing no signs of letting up for their fight for increased wages. Since its start on September 15, the UAW is showing no signs of letting up soon. In a recent video released by the union, UAW president Shawn Fein said: “If we don’t make serious progress by noon on Friday, Sept. 22, more locals will be called on to stand up and join the strike.”
Others feel that the union demands could prevent the Big 3 (General Motors, Ford, and Stellantis) from being competitive. Either way you look at it, the forecast for a quick resolution does not look bright.
How The UAW Strike Is Impacting Auto Dealerships
Current interest rates are prompting auto dealers’ customers to pivot from their normal purchasing or leasing habits- there’s no question about it. The average monthly car payment for a new vehicle has soared to well over $700. And the average used vehicle payment is now over $500.
Customers that are nearing the end of their leases are returning to the showroom to find that the new model of the same vehicle has a payment 50% to 100% more than their current lease. Customers are deciding to purchase their existing vehicle rather than leasing a new one.
Lease turn-ins have historically been a great source of used inventory for both dealers and auto auctions. While this lower inventory has kept wholesale prices up, it has also put consumers in a pinch regarding what they can afford. It’s the beginning of a vicious cycle.
The Stike Isn’t The Only Thing Impacting The Car Market
Dealership owners are seeing lack of inventory, poor inventory mix, lack of qualified employees, increased wages required to retain current employees, and inflationary related costs of vendor contracts. The list goes on and on.
In the face of all the challenges, most dealers, while cautious and maybe even anxious about the future, are still optimistic and looking for ways to grow. In our experience, dealers are leaders.
A Dealership Advisor’s Advice
Car dealers are leaders not only in their businesses, but also in their communities. Leaders are positive people that see opportunity even in the worst of times. And if you ask a seasoned dealer, they will tell you that they have seen far worse times than this!
The message to dealers is to recognize the obstacles we may all be experiencing but remain positive. Keep your people positive because they are the heart of your success. Remember, “opportunity comes to those who seek it.”
Good luck and good selling.
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Dealership Experts
Terry Schwer is an experienced dealership consultant specializing in operational efficiency, financial strategy, and dealership profitability. With years of hands-on experience working alongside automotive dealers, Terry helps clients navigate industry changes, optimize their fixed operations, and prepare for market uncertainties. His practical, data-driven approach helps dealerships stay resilient and profitable through shifting economic landscapes.