The Long Road Home: Resilient Car Dealerships Will Still See Hurdles Throughout 2021
Although news surrounding the COVID-19 health pandemic has begun hinting at hope on the horizon, we still have a way to go before returning to anything that resembles 2019’s version of “normal.” This global catastrophe has left no industry untouched and the automotive sector has taken a significant hit as well. Car dealerships specifically will have a long road home toward recovery and according to Marc Spizzirri, those already struggling might have to take a long hard look in the mirror. Marc Spizzirri is an auto and financial industry veteran who provides financial services to dealerships. This form of guidance can get some on the right track while guiding others out of the industry. It’s a case-by-case approach, according to Mr. Spizzirri, but 2021 could be a make or break year for some dealerships.
According to automotive data and analytics firm ALG, it’s possible that 15.5 new light vehicles will be sold in the U.S. in 2021. The problem is that figure is well below the 16.9 million that were expected to be sold in 2020 had the pandemic not occurred. In a recent report from WardsAuto.com, “new- and used-vehicle sales really did bounce back in 2020, considering how low U.S. light-vehicle sales fell in the worst three months of business and factory shutdowns.” Further, there are reasons “to be very optimistic,” one auto executive is quoted in the article as saying, but this turn-around won’t come until the second quarter of 2021.
It begs the question: What’s a struggling dealership to do? Marc Spizzirri, a retired car dealer with experience in both classic and new vehicles, says there’s always 25 percent of dealers struggling more than others. “At what point do these folks consider selling and moving on? If you’ve been there for 10 years, maybe it’s time to sell,” Mr. Spizzirri recently said. It’s possible to hire outside help, which he’s personally provided to some dealers in the past. The choice may be to read the writing on the wall: The struggling dealership is never going to be able to turn things around financially and 2021 is the sign that it’s time to move on. Further complicating matters is the possibility of major auto manufacturers doing away with car dealerships entirely. A Tesla car dealership looks more like an Apple computer products store than any sort of place for an auto enthusiast or prospective buyer. The thing is, this could become the new norm and struggling outlets will face even more hardships without product to show off to walk-in customers.
As stated above, it’s a case-by-case approach and Marc Spizzirri wants dealers to know that the pains of 2020 won’t subside for many more months. The tough choices ahead are traditionally made less painful when someone with financial and automotive experience can help in the process.
