Full speed into the future: 6 takeaways from NADA 2022
NADA 2022 is a wrap. After a pandemic-induced hiatus, the energy in Las Vegas last month was high. People were happy to see one another and ready to do business in person again.
Attendees seemed to have a newfound eagerness to learn about new technology and were ready to embrace further digital transformation. NADA, for its part, announced support for a concerted effort to help dealerships sell electric cars.
Here are our six takeaways from the show:
Old school mindshift.
One of the things we love about the industry is that a lot of dealerships are family businesses passed down through generations. With that comes a lot of tradition, which can sometimes translate to reluctance to change.
During COVID, everyone was forced to do business differently. That allowed some of the more old school people and organizations to experience new ways to work that are just as effective, if not more so, than the old ways.
The mindshift was noticeable. People are asking, how can we continue on this trajectory? How can we become more progressive? What else is out there that we can explore?
Hybrid work comes to dealerships.
Even before COVID, forward-thinking dealerships were offering salespeople hybrid work. They no longer had to be physically in the dealership during working hours. They could set their own hours and make their own appointments. The only time they had to come in was to meet customers for a test drive. Now that mentality is spreading to all the other departments within the dealership, and they’re looking for technology to support it.
Websites have gotten much more advanced and easier to use in the past few years, and they’re helping salespeople close deals much faster. Selling a vehicle is no longer a process with dozens of steps. Customers can go online and pick out the vehicle and features they want, before they talk to the sales person. They come in much more knowledgeable and prepared, making it much easier to get to the end game.
EVs get a big push.
There’s been a lot going on in the automotive world in the past few years. Shared driving became popular in the form of Uber and Lyft; Zipcar and other short term rentals; shared ownership models, and car as a service models. There was a lot of buzz around autonomous driving. New online-only dealerships cropped up.
There were so many new things happening it was hard to know where to look. Now NADA is squarely focused on helping dealerships sell electric vehicles, which it characterized as the biggest shift in the 122-year history of the industry. To that end, they announced partnerships with the Center for Sustainable Energy and Plug in America to give training and education to dealers.
There are a lot of factors pushing this to the top of the agenda. More manufacturers are offering electric or hybrid models. Consumer adoption is growing. Sales of EVs are up 98% since 2020. There were about 4 million all electric sales in 2021, and over 2.4 million in hybrid sales. In February, President Biden signed a bill to invest $5b over 5 years to build a nationwide electric vehicle charging network. And now we have skyrocketing gas prices.
Ultimately, every brand is going to have to have an EV and or a hybrid option in their line in order to compete. NADA wants to make sure dealerships are prepared to speak to new questions about range, batteries and charging station availability and home charging.
Inventory shortages drive consolidation.
Profit margins were at an all time high last year, but access to vehicles was a nightmare. Dealerships have had to pound the pavement looking for used cars, attending auctions and going after used rentals.
Some dealerships have waiting lists for vehicles and have used savvy marketing to create an aura of exclusivity and keep customers engaged while they wait. Smaller dealerships have had the hardest time getting inventory and we’re starting to see some of them sell out to bigger groups. With inventory shortages likely to continue for another 6-9 months, there may be more consolidation yet to come.
Innovation comes to Dealer Management Systems.
New cloud-based software vendors are reinventing the DMS and pushing market incumbents to up their game. Upstart vendors are taking more of a fintech approach, with subscription business models, open APIs that allow third parties to build applications, and bi-directional integrations.
That should push other vendors to follow suit. Ultimately, it will open up the ecosystem and make it more partner friendly so that more people inside and outside the dealership can collaborate and share information.
As long time sellers of technology to auto dealerships, the status quo has always been our biggest competitor. COVID smashed the status quo, and just about everyone now sees that they can no longer hold on to the old ways.
The next generation coming into the business is going to be much more willing to implement the latest and greatest new technology, even if it means taking some risks. Now it seems that the old guard will no longer stand in their way. They realize that change is going to happen with or without them being on board.
Manufacturers are racing to see who can build the coolest EV. NADA leadership has crystallized their vision and mission around supporting dealers in selling the cars of the future. Given the amount of interest in new technology we saw at the show, dealers are ready and eager to start building the dealership of the future in which to sell them.