The main reason: Outdated processes and software systems
Around the world, there is a clear and significant move away from traditional, one-store dealerships (which are mainly family-owned) towards large multi-dealer groups.
To see a very straightforward example, let’s look at Canada.
There are a total of 3,000 new car dealerships in Canada. The number of dealerships with individual principal owners has shrunk by 1,000 during the past decade. Today some 85 groups own 900 dealerships. And this trend looks to continue.
The same has been happening in the U.S., where the average public dealer company has gone from 22 to 150 stores over the ten years.
Auto manufacturers are encouraging their best dealers to buy other outlets, particularly underperforming ones. And this worldwide trend towards larger groups will accelerate, despite profitable dealerships under family ownership.
Many manufacturers want to reduce their dealership base and increase volume per franchise, which would give store owners more money for investment and improvement of brand image.
As industry experts are saying:
- In today’s world, stores need to become more sophisticated in their management, which is easier for larger groups with more capital.
- Traditional family dealerships use legacy systems and processes that are the same today as 20-30 years ago. The days of success with such methods are numbered.
What you can do
- The right DMS is a big step towards professionalizing a dealership.
- But a system alone will not suffice. You need your DMS to be aligned with industry best practices, and your DMS provider to offer help in implementing these best practices as well as efficient processes using the software as a backbone.
Posted by almcclymont 
