Area Auto Dealers Optimistic About Year Ahead – Business West

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Rob Pion says the customer experience has become more important in a competitive marketplace for dealers.

Auto dealers have seen it all over the past few years, from soaring costs for vehicles, parts, and labor to inventory shortages to a rapid rise in interest rates.

But they’ve adjusted and adapted, they say — and so have consumers.

“We’re still doing all right. There still seems to be plenty of traffic and activity out there,” said Rob Pion, general manager of Bob Pion Buick GMC in Chicopee. “I would say there was a period last year where people really started to get rate-conscious, but that has passed to some extent. We’ve seen rates start to come down as well as people just kind of accepting it. I mean, it’s not our rate; the Fed sets the rate.”

Despite those concerns, Pion added, “2023 was a great year for us. GMC’s got a couple new products and redesigns coming out, and Buick’s got a number of redesigns coming out. We’re going to have almost a completely new set of models by this time next year. So there’s a lot happening. The used-car market has somewhat stabilized, too, and think that’s going to continue to stabilize throughout ’24. But right now, the public still seems to be out there buying and looking for vehicles.”

Especially on the new-car side, “everything’s kind of back to where things were,” said Mike Filomeno, general manager of Marcotte Ford. “The inventories are really good; products are coming in quickly. Prices are still up there, though, based on supply and demand.”

Manufacturers recognize the dual crunch of rising costs and rising interest rates, however, said Mike Marcotte, president of the dealership. “When interest rates rose last year, Ford started putting programs on the new vehicles again, like the 1.9% or lower interest rates that help with the financial changes going on. The market is definitely starting to react to that.”

Pion has seen similar moves. “Throughout the year — and it’s still continuing — GM has had some aggressive financing rates out there. We’re not seeing the big rebates of years past, but depending on credit approvals, we’ve seen 3.9%, 2.9%, they even went down to 0.9% for a little bit for 36 months. So there has been some help from the factory on that side of things. Not the big cash rebates that we saw in years past, but certainly interest-rate relief.”

Carla Cosenzi, president of TommyCar Auto Group, said business has been strong, and she’s seeing positive trends across her family of six dealerships.

“We’re not seeing the big rebates of years past, but depending on credit approvals, we’ve seen 3.9%, 2.9%, they even went down to 0.9% for a little bit for 36 months.”

“Despite inflation affecting costs of parts and services, consumers understand the situation,” she told BusinessWest. “Manufacturers are offering more aggressive lease incentives, which our customers are taking advantage of, leading to increased business. Certain manufacturers like Volkswagen, Nissan, and Hyundai are also offering 0% financing to consumers.”

That’s in addition to TommyCar’s internal loyalty program, which allows customers to earn up to 15% back on every dollar spent in the service department, which can be used toward their next vehicle purchase.

Meanwhile, “our inventory levels for both new and used vehicles are returning to normal,” Cosenzi noted. “We’ve seen an increase in our used inventory levels, primarily due to steady trade-ins and our aggressive buy-back offers, which have helped us maintain a steady supply of used cars. We’re optimistic about the year ahead.”

Back in Stock

Marcotte said his dealership, like many others, dipped to around half of normal inventory in the wake of the pandemic. “But now we’re back to good levels. I’m so glad we can offer gas, diesel, hybrid, and now electric vehicles, which are 8% of the market right now. We’re in every segment.”

Used-car inventories were one of the biggest stories in auto sales across the U.S. over the past few years, as shortages led to soaring values. That situation has stabilized (not necessarily to car owners’ benefit; see story on page 22), but dealers are breathing easier when it comes to what they can put on their lots.

“We’re a big Ford certified pre-owned dealership,” Filomeno said, “and there’s still demand for a good used car out there. A lot of people have been holding on to their cars for the last five years and repairing them because there wasn’t a vehicle for them to buy, so now they’re trying to trade those vehicles in.”

Marcotte Ford’s mobile service vans

Marcotte Ford’s mobile service vans have been a popular customer perk.

Pion agreed, noting that inventory has rebounded, for both new and used vehicles, and across the spectrum, from cars to SUVs to trucks.

“Some of the specialty trucks, especially the heavy-duty trucks, things of that nature, are still difficult to get. It could be anywhere from 12 weeks to 8 months to get it. But people have also become a little more accustomed to that today, too. They don’t expect things tomorrow. They kind of know what it’s like, so they’re willing to wait a little longer.

“Specific trucks are still hard to get,” he went on. “If you come in here and you want a black one with a black interior with the 22-inch wheels with this type of engine … that could still be a hard truck to get. If you came in here and said, ‘hey, Rob, I want a pickup truck. I don’t need to have a big engine, I’m going to use it mostly for my family, some landscaping on the weekends, just around the house’ … I have that. So that purchaser who isn’t incredibly specific about their needs can walk in and be serviced pretty quickly. But that business owner that only wants the white truck for their company? That can be tough.”

The used-car market has continued to favor sellers, Pion added, “and I think it’s created a desire in some people to keep their vehicles longer. In the service department, we definitely see larger repair bills than we have in the past because people are keeping their vehicles longer.”

Another big shift in auto sales continues to be the proliferation of electric vehicles (EVs), a trend that TommyCar has embraced.

“We’ve been a strong electric-vehicle dealer and continue to be one of the top electric-vehicle dealers,” Cosenzi said. “Electric vehicles are more affordable than ever, thanks to federal and state rebates, along with manufacturer incentives.”

While some new EVs, like the Volvo EX90 and EX30 models, require pre-orders due to their popularity and limited availability, others can easily be found on lots, including the Volkswagen ID.4, Hyundai Ioniq 5 and 6, and Nissan Ariya.

“Once people are in the EVs, they’re going to buy another EV. I love the EV. That’s my next purchase.”

Marcotte Ford boasts three EVs — the Mach-E, the F-150 Lightning, and the E-Transit — and “they’re bringing a different shopper than we normally see, with different trade-ins. So it’s bringing a new face, a new customer, into the dealership,” Marcotte said. This evolution is also why the dealership installed four high-speed EV chargers on its lot last year.

“We see people from all over New England coming through here on the weekends. They’ll charge up before going skiing,” he said. “Our employees, if they buy, can charge right here. Customers can come here to charge.”

Marcotte said EV adoption is still increasing, but not as quickly as before, and Ford has changed its production level based on that trend, but the company still envisions a strong future for electrics.

Carla Cosenzi

Carla Cosenzi says interest-rate incentives, the return of healthy inventory levels, and solid options in electric vehicles have all boosted sales.

“Once people are in the EVs, they’re going to buy another EV. I love the EV. That’s my next purchase,” he told BusinessWest, noting that some drivers are more comfortable driving hybrid vehicles first, and many of those will eventually move to all-electric as well. “So it’s good we can offer every option to customers.”

Many drivers, he added, are waiting to feel more confident about charging stations becoming more widespread. “So once there’s more infrastructure, I think that anxiety will go away a little bit.”

Whether they’re buying electric, hybrid, or traditional vehicles, today’s drivers tend to be interested in certain bells and whistles, Cosenzi said.

“Customers are seeking vehicles with advanced high-tech features such as adaptive cruise control, lane-keeping assist, automatic emergency braking, large touchscreens, smartphone integration, and voice recognition,” she noted. “These trends reflect a desire for practical, safe, convenient, and sustainable vehicles with the latest technology.”

Out and About

Still, at the end of the day, customers still appreciate a positive experience when purchasing a vehicle, Pion said.

“These brands mean everything to us,” he said, noting that he’s now the only Buick dealership within an hour’s drive. “I just hope that we can offer an experience where people want to be here and be a part of the family. That’s how we try to treat everybody and differentiate ourselves. I try to meet and talk to as many of my customers throughout the day as I can because it’s important to me.”

Marcotte agreed the customer experience is critical. One intriguing development at his dealership has been the introduction of five mobile service vehicles that will drive to a home or business and service a car on the spot.

“It’s bringing the convenience to the customer, and we know time is so valuable, and want to get them up and running,” Marcotte said, noting that the program has been a positive for Ford. “It’s a whole brand differentiator, and not all manufacturers are up on this. So we keep focusing on the guest experience, giving them every option, and now you can be at your home while we do the oil change, or keep your business up and running. We’ve had really great feedback from the customers.”

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