It's no big secret that the world of automotive is changing. From the largest automakers in the industry exploring subscription services and transportation-as-a-service (TaaS) ventures to the rise of ridesharing apps and tech companies that are quickly moving from the status of interlopers to the future of the marketplace, it is beyond obvious that we are in a time of tumult and uncertainty.
However, aside from the intrigue found within these developments, it also appears as though this period of technological advancement and change could lead to a significant drop in actual brick-and-mortar car dealerships.
As Steven Finlay of WardsAuto reports, today's automotive marketplace encompasses about 16,800 dealerships; about 2,000 less "rooftops" when compared to a decade ago. While this downward trend is disconcerting (to say the least), Finlay goes on to note that some in the industry predict the decline to be even steeper in the coming years, leading to roughly 9,000 total dealerships spread across 1,000 unique owners (down from the 9,000 or so now) by 2034.
In other words, the traditional pipeline to ownership that runs directly through your dealership could be on the verge of drying up in a hurry.
As far as why the future looks so grim from car dealerships in the coming years, a variety of factors loom large in this discussion. Self-driving vehicles (which appear to serve as the foundation for autonomous taxi services and other transformational products), the rise of ride-hailing, viable TaaS alternatives, and consumers who are more willing to rely upon technology than traditional car ownership to provide their means of transportation all play a role in this dramatic industry shift.
While this topic might be a hard one to face as a dealership, understanding the signs of a shifting marketplace - and planning accordingly - is a vital process for any business that hopes to emerge as a profitable and solid enterprise in the aftermath of this industry transformation.
Want to dig even deeper into this look at the future of the automotive world as you learn more about how your dealership fits into this shifting landscape? Then be sure to follow up with the full scoop from Finlay and the WardsAuto team on the other side of the link below.