- Jan 3, 2019
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- Marc
I just went through Cox Automotive's 2024 forecast, this is what I noted:
What I believe car dealers can do to come out ahead:
- Slow Growth Ahead, But No Recession: The forecast for 2024 predicts weak economic growth due to high-interest rates and declining inflation, which will limit consumer spending and slow job and income growth. However, a recession is expected to be avoided.
- Vehicle Supply Recovery: New vehicle inventories are anticipated to substantially increase from 2022 levels, leading to higher incentives and discounting. This is expected to improve overall vehicle affordability.
- New Vehicle Sales Increase: New vehicle sales in the U.S. are projected to rise slightly, less than 2%, finishing at 15.6 million sales in 2024. Retail new vehicle sales will be mostly flat, and fleet sales should recover.
- Modest Decline in New-Vehicle Prices: New-vehicle transaction prices are likely to see modest declines, driven by increasing discounting and more incentives.
- Growth in the Used-Vehicle Market: The used-vehicle market is expected to see minimal gains, with total sales possibly reaching 36.2 million. Certified pre-owned sales are projected to outpace overall used-vehicle growth.
- Normalization in Vehicle Depreciation: The year 2024 is forecasted to be the first in five years to experience normal depreciation patterns in the vehicle market.
- End of the Seller’s Market: Dealer profitability is expected to decrease in 2024 due to increasing incentives and discounts, higher material and labor costs, and compressed margins.
- Growth in the Electric Vehicle Market: More models, incentives, discounting, advertising, and sales efforts are anticipated to drive EV sales, which are expected to surpass 1 million units in 2024, accounting for over 10% of total sales.
- Improvement in Car Buying Experience: The car buying process is expected to become more efficient and satisfying for consumers in 2024, thanks to better inventory, return of discounting, and improved dealership processes.
- Return to Normalcy in the Auto Market: The forecast anticipates a return to balance in the U.S. auto market, with more choices and better deals for consumers and fleet buyers, marking a shift from the chaos of the past few years.
What I believe car dealers can do to come out ahead:
- Efficient renewal processes: Emphasize the development and enhancement of renewal in-house operations. I still see too many of you guys relying on new customer acquisition strategies. As a part of my business is paid ads, I can't complain, but I still feel it's dumb to acquire a customer at 300-1,000 when you could have sold a second vehicle to the same customer for $0.
- Personalized Marketing and Customer Engagement: Utilize data analytics to understand customer preferences and tailor marketing efforts accordingly. Personalized marketing can include targeted email campaigns, customized offers, and personalized communication.
Zero and first-party data are going to be even more important. 2024 is the year we can still play with 3rd party data WHILE learning to leverage 0/1st. This time will not come back.
- Electric Vehicle (EV) Integration and Education: Marketing to sell EVs is different, it now requires more content to educate customers that are still on the fence. Invest in evergreen content to boost inbound traffic & leads for the vehicles. You guys need it, these things are piling up everywhere.
- Flexible Financing and Incentive Programs: Customers are getting squeezed left and right. Better offers including attractive financing plans are where I see most lift these days. I think this will continue for the next 24 months.
- Enhanced Customer Service and Experience: Focus on improving the overall customer experience, both online and in-person. This includes offering excellent after-sales service, maintaining a customer-centric approach in all interactions, and ensuring a hassle-free buying process. High-quality customer service can lead to repeat business and referrals, which are crucial for long-term profitability.
Cheat code: Use automation & AI, it works and it's very possible to make it high value for our customers.
Did I miss anything?
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