EFG Companies Predictions for the Industry’s Future

EFG Companies Predictions for the Industry’s Future

The primary challenge facing dealers today is evolving their retailing process to capitalize on changing consumer habits. Utilizing the company's 40+-year history in the F&I industry, four EFG Companies executives offer their predictions.

EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced its 2020 predictions and recommendations for the retail automotive and powersports F&I markets. With another flat year on the horizon, EFG leaders predict that the biggest changes will revolve around process improvements to better compete with industry disruptors and capitalizing on changing consumer purchasing habits.

Over the last few years, the auto industry has seen a significant number of disruptors enter the retail automotive space, from ride-hailing services like Uber and Lyft, to companies challenging the way people purchase vehicles, like CarMax and Carvana. Now, the industry is at the beginning of a re-alignment with these disruptors and evolving consumer purchasing habits.

The pace of change affecting the auto retailing industry today is unprecedented. However, it’s important to remember that the goal of the dealership hasn’t changed. The goal is still to sell vehicles profitably. The primary challenge facing dealers today is evolving their retailing process to capitalize on changing consumer habits.

Utilizing its 40+-year history in the F&I industry, EFG Companies offers the following predictions:

Online Sales

Consumers have been driving the need for dealers to invest in online sales models for the last few years. However, the technology just wasn’t there. We’re on the brink of automotive retail technology catching up with consumer demand. I believe over the next few years, we will see dealers more heavily invest in an online sales model. Aside from the logistics of completing a purchase online with the right technology solutions, the role of the BDC will change, hiring and training will change, and data security and fraud prevention will be top of mind.

John Pappanastos, President and CEO, EFG Companies

Service Drive Investment

On the service side, dealers have come to the realization that they need a different type of service advisor. Going forward, salesmanship needs to enter the mix of service manager requirements. The agents we work with are training service managers to answer the question, “Why get your work done with my dealership?” This is a shift in mindset that requires ongoing training, pay plan changes, and creative customer service value-adds, such as door-to-door pickup and delivery, price matching on tires, and complimentary services. It includes streamlining basic services, like oil changes, to keep customers moving. And, it includes tech upgrades in the service center for advisors to provide more transparency and to communicate with customers in the manner in which they want to be communicated. A great example of this is the rise of sending customers video inspections of their vehicles.

Adam Ouart, Vice President, Agency Services

Finance and Lease Creativity

Over the last several years, dealers and auto lenders have pushed the boundaries of auto lending. We’re now seeing terms as long as 72 months, but auto payments still average more than $400. These boundaries were pushed to lessen monthly payments and make more expensive cars more accessible. However, that clearly isn’t working. If it was, used cars would not have such a strong market position across all credit tiers. Going forward, we can expect dealers to find creative ways to shorten terms and trade cycles. We’ll see more lease options with more granular terms to match consumer buying and driving habits. This need is also driving the rise of subscription-based models in the dealership.

Brien Joyce, Vice President, Specialty Services

Five-year Outlook

Dealerships probably won’t look much different than now. The biggest changes dealers will have to make will be cultural and process-oriented. The first priority of all dealerships is to provide an exceptional customer experience. While this isn’t new, the stakes are higher. Going forward, dealers will have to adjust their sales model to enable customers to purchase their vehicle based on their own personal preferences, whether that’s online, over the phone, or in the showroom. To incentivize more foot traffic, dealerships will become more attractive places to visit. You’ll see greater concierge services, like vehicle delivery and pickup, and the dealership will become a place that allows the dealer to build a community.

John Stephens, Executive Vice President, EFG Companies

EFG Companies

You May Also Like

Fullpath Announces Integration with Cox Automotive VinSolutions

Fullpath’s integration with VinSolutions aims to build strong data strategies for dealerships and benefit users of both platforms.

Fullpath, an automotive enhanced customer data platform (CDP), announced a powerful API integration with Cox Automotive's VinSolutions, a provider of automotive retail CRM services. This new two-way API integration will mutually benefit dealer customers of both Fullpath and VinSolutions.

Customer Data Platforms are designed to consolidate the data sources used by car dealers into one central location through APIs, making data usable for gaining insight into shopper behavior and dealership operations. This two-way API integration will allow for the seamless transference of data between platforms, allowing Fullpath's CDP to pull data from the CRM and enable the automatic update of customer records to include activities tracked by the CDP in real time.

DAS Technology Expands Collaboration with General Motors

GM also selects DAS to participate in its 2024 Business Development Center Workshop Dealer Tour across 14 major U.S. markets.

Dave Cantin Group Introduces AI-Powered Dealer Data-Mining Software

The AI-powered dealer data-mining software will help accurately value the nation’s more than 18,000 franchise dealerships.

Rick Case Honda Recognized as Most Awarded Volume Dealer in American Honda History

The largest volume Honda dealer in America has also received the Honda President’s Elite Award 16 consecutive years.

CarNow Joins the Amazon Web Services Partner Network

This automotive dealership operations software looks to be enhanced through incorporation of Amazon Web Services (AWS) generative AI tools.

Other Posts

Physical Audits Support Software in Thwarting Dealer Cybercrimes

Dealerships face rising cybercrimes and must prioritize frequent physical security audits alongside software compliance tools.

SafePoint Introduces Enhanced Features

SafePoint’s new features were made to monitor inventory, recapture lost service revenue, and supercharge retention.

Reynolds and Reynolds to hold Automotive Amplifiers Contest

The Automotive Amplifiers Contest carries $15,000 in prizes and celebrates individuals at dealerships who are amplifying retail automotive.

EpiCar Announces First Auction Event

EpiCar’s first auction event on June 17 will aim to connect dealers directly with private car sellers for efficient inventory sourcing.