I just went through Cox Automotive's 2024 forecast, this is what I think is important coming into 2024:
Car Dealerships are adopting AI: Employees & managers will start playing with AI, realizing it's not replacing us but enabling us to perform our most important (and fun) tasks. From making things easier using ChatGPT or having an AI Phone Receptionist, AI will reshape the way we do business.
Slow Growth Ahead, But No Recession: The forecast for 2024 predicts weak economic growth due to high-interest rates and declining inflation, which will limit consumer spending and slow job and income growth. However, a recession is expected to be avoided.
Vehicle Supply Recovery: New vehicle inventories are anticipated to substantially increase from 2022 levels, leading to higher incentives and discounting. This is expected to improve overall vehicle affordability
New Vehicle Sales Increase: New vehicle sales in the U.S. are projected to rise slightly, less than 2%, finishing at 15.6 million sales in 2024. Retail new vehicle sales will be mostly flat, and fleet sales should recover.
Modest Decline in New-Vehicle Prices: New-vehicle transaction prices are likely to see modest declines, driven by increasing discounting and more incentives.
Growth in the Used-Vehicle Market: The used-vehicle market is expected to see minimal gains, with total sales possibly reaching 36.2 million. Certified pre-owned sales are projected to outpace overall used-vehicle growth.
Normalization in Vehicle Depreciation: The year 2024 is forecasted to be the first in five years to experience normal depreciation patterns in the vehicle market.
End of the Seller’s Market: Dealer profitability is expected to decrease in 2024 due to increasing incentives and discounts, higher material and labor costs, and compressed margins.
Growth in the Electric Vehicle Market: More models, incentives, discounting, advertising, and sales efforts are anticipated to drive EV sales, which are expected to surpass 1 million units in 2024, accounting for over 10% of total sales.
Improvement in Car Buying Experience: The car buying process is expected to become more efficient and satisfying for consumers in 2024, thanks to better inventory, return of discounting, and improved dealership processes.
The year of the CDP: Car dealers start to understand what a CDP is and how to choose the best one. They start to leverage their zero and first party data to help with their marketing & sales effort. Car sales is all about timing, and a great CDP will help you accomplish that.
Return to Normalcy in the Auto Market: The forecast anticipates a return to balance in the U.S. auto market, with more choices and better deals for consumers and fleet buyers, marking a shift from the chaos of the past few years.
What I believe car dealers can do to come out ahead:
Efficient renewal processes: Emphasize the development and enhancement of renewal in-house operations. I still see too many of you guys relying on new customer acquisition strategies. As a part of my business is paid ads, I can't complain, but I still feel it's dumb to acquire a customer at 300-1,000 when you could have sold a second vehicle to the same customer for $0.
Personalized Marketing and Customer Engagement: Utilize data analytics to understand customer preferences and tailor marketing efforts accordingly. Personalized marketing can include targeted email campaigns, customized offers, and personalized communication.
Zero and first-party data are going to be even more important. 2024 is the year we can still play with 3rd party data WHILE learning to leverage 0/1st. This time will not come back.
Electric Vehicle (EV) Integration and Education: Marketing to sell EVs is different, it now requires more content to educate customers that are still on the fence. Invest in evergreen content to boost inbound traffic & leads for the vehicles. You guys need it, these things are piling up everywhere.
Flexible Financing and Incentive Programs: Customers are getting squeezed left and right. Better offers including attractive financing plans are where I see most lift these days. I think this will continue for the next 24 months.
Enhanced Customer Service and Experience: Focus on improving the overall customer experience, both online and in-person. This includes offering excellent after-sales service, maintaining a customer-centric approach in all interactions, and ensuring a hassle-free buying process. High-quality customer service can lead to repeat business and referrals, which are crucial for long-term profitability.
Cheat code: Use automation & AI, it works and it's very possible to make it high value for our customers.
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