A survey conducted by Equifax, in partnership with NIADA, has found that independent auto dealers are anticipating sales growth to slow during the third quarter of 2016. The survey included data from 150 different used car dealers, which was formally presented during the 2016 NIADA Convention and Expo in Las Vegas.
Equifax has found that auto dealers are less optimistic that sales growth will increase in the third quarter of 2016. Approximately 44% of the auto dealers surveyed responded that they expect to see growth. This is down 12% from the second quarter, in which 56% of the dealers answered with the same response.
Although auto sales may slow, used vehicle dealers expect to see an increase in the service department. The percentage of dealers that expect to hire new service personnel increased from 21% to 39%. This change is from the second quarter to the third.
Shift in Marketing
While dealers have different growth expectations, Equifax's survey concluded that the industry is stable. John Giamalvo, the vice president of dealer services at Equifax, summarized this by stating that “while there are some indicators that show slightly less growth, dealers still see the industry as stable.”
Giamalvo went on to explain that dealers are shifting their marketing approach. “The fact that investment levels across different marketing channels has increased is a sign that shift to digital and its potential, is a reality," stated Giamalvo.
Another clear sign of this change is the percentage of survey respondents planning to maintain or increase their investment in digital media. Approximately 95% of these respondents planned to spend money in online and mobile channels this quarter.
The information contained in the Equifax survey is based on dealer responses, which calls into question how accurate the results might be. While the final results may vary from the expected numbers, Equifax’s survey offers reliable information on what dealers should be able to expect.
Scott Lilja, the senior vice president at NIADA, summarized this by noting that "partnering with Equifax on this quarterly business confidence survey has allowed us to gauge the pulse of the industry and the needs of our 15,000-plus dealer members." Dealers across the country agree and continue to rely on surveys from Equifax for accurate information surrounding the auto industry.
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