Shuttle drivers, F&I managers and maybe even traditional sales associates. These are among the jobs that will radically change — or even disappear — as dealerships adjust to a permanent shift in buyer behaviour in the post-pandemic world, industry experts say.
In their place, customers will be given more self-serve options, and staff will be cross-trained to be all-in-one contact points for car buyers, they say. Dealerships themselves will begin to evolve from being sales and financing centres to places where transactions are completed and to delivery points for cars ordered online, they add.
As revenue from sales declines, dealerships will become “delivery and repair hubs,” said Robert Karwel, senior manager of the Power Information Network at J.D. Power in Toronto.
Retailers will look to parts and service as the majority share of revenue, said Greg Carrasco, vice-president of operations at Oakville Nissan and Oakville Infiniti in Ontario.
“Services will grow. You’ll have to increase your service capacity.”
According to a report by DesRosiers Automotive Consultants (DAC), fixed operations generated 32.1 per cent of dealership gross profits in 2019, while new-vehicle sales generated 40.5 per cent. This despite gross fixed-ops revenue being just 9.2 per cent of total revenue versus 71.1 per cent for new-vehicle sales.
Used-vehicle sales and F&I accounted for the balance. Figures for 2020 have not been finalized, according to Dennis DesRosiers, president of DAC.
“Fixed ops continues to be ... one of the most important profit centres,” the report said.
NEW ROLES FOR WORKERS
As this revenue shift progresses, Carrasco said, every dealership will have to reassess the roles of employees. This is amplified by the contactless practices that came into play with the onset of COVID-19, he said.
“Shuttle drivers? You don’t need them,” Carrasco said. Instead, dealerships will need to have a fleet of self-serve loaner vehicles for customers bringing in their cars for service.
In other cases, concierge services — picking up and delivering serviced cars to a home or workplace — will be expanded to all vehicles, Carrasco said. These services currently are offered primarily by luxury brands.
Because today’s buyers do much of their research online, dealerships will require fewer sales associates waiting for walk-in business, he said. Some dealerships will soon require buyers to make appointments for in-person visits to assure that a staff person is on duty.
Many buyers still want to take a test drive, Carrasco said. However, rather than having customers come to the dealership and head out with a sales associate, the dealership will take the cars to them.
Vehicle owners appear ready to pay a premium for such service enhancements. A September survey of U.S. dealerships by global consultancy McKinsey & Co. found that, as a result of the pandemic, respondents are more interested in contactless services. About half of the respondents said they are willing to pay extra fo it.
The role of F&I managers will also evolve but likely not disappear altogether because it’s important to have an expert who can deal with a buyer’s finances. However, the F&I manager will be cross-trained to have greater product knowledge and handle more of the sales process, Carrasco said.
‘DOWNSIZED’ FOR GOOD
Trevor Boquist, who owns four Ford dealerships in Saskatchewan and Manitoba, said he has reduced the number of F&I managers at each of his dealerships to one from three. His Regina-based company, Driving Change Automotive Group, is moving to a single-pointof-contact model in which one person handles the entire purchasing process — from the point of initial contact (typically online), through negotiating, appraising trade-ins, arranging financing and delivering the car to the buyer’s home.
“Our administration and marketing departments have all been downsized, and I don’t see them resuming” their previous size, Boquist said.
Total employee count at his four dealerships dropped to 315 during the pandemic from a high of 390 said Boquist, who is 2020-21 chairman of the Canadian Automobile Dealers Association. He expects that once the industry recovers, the total staff count will settle in at 335 to 340, off 15 per cent from pre-pandemic levels.
Another way to cut fixed costs is to substantially reduce the amount of inventory on hand, said J.D. Power’s Karwel. While dealers still need to keep a small inventory of vehicles to service the occasional walk-in, most buyers are doing research online and are ready to order, and wait for, the vehicle they want.
Customers seem to be content to live with shorter operating hours because the dealerships are providing more pickup and delivery services, Boquist said.
“We’re not going to be providing some services [such as shuttle] in the future, and the customers don’t seem to be missing it,” he said.
“Whenever we’re all vaccinated and return to the new normal, will all of those services be there?”
Boquist expects they will never return.