Why Auto Dealers are Charging Over Sticker Price | Automotive Industry 2022
Why Auto Dealers are Charging Over Sticker Price | Automotive Industry 2022
Will auto manufactures usurp car dealers and start selling direct to consumers? I think that current trends we’re seeing in the automotive industry hint that this could be a plausible future state in auto. We’ve seen digitally enabled sellers like Carvana break into the top 10 U.S. eCommerce retailers while traditional auto dealerships are charging customers above sticker price due to supply constraints. In this video, Nick Johnson joins me to discuss what we’re currently seeing in auto and what we think the future of this industry looks like.
See how I flipped a brand new car for a $20k profit here: https://youtu.be/nOqSW-OXNJM
#Automotive #Dealership #Carvana
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Great video!
In my opinion traditional car dealers are in real trouble especially with the rising adoption of EVs. Car manufacturers have never had to compete with a company that:
1-Sells direct to consumer (saving 2-5k per car)
2- Generates 30% automotive gross margin
3- Pays $0 in marketing per vehicle — I am guessing you know which company I am talking about.
So they have to start cutting costs to be competitive and the existence of dealerships don’t aid in that. You can already see how Ford is trying to get out of their dealership network by splitting the EV branch in hopes to start selling DTC
Add on top of that service revenue decline once EVs are mainstream. EVs require very little service.
Future of traditional auto dealers looks bleak in my opinion. But there is always an opportunity for the ones smart enough to pivot into a growing market versus optimizing a shrinking market.