Three Strikes Might Mean Out For Car Dealerships

Thanks to the increase in employment rates, gas prices coming back down to a more reasonable price, and people traveling more by car than other modes of transportation, the car industry has been experiencing a heyday like never before. In 2016, the car business has broken sales records across the board. With that said, it might not be time for car dealerships to take a victory lap and rest.

This past November, the price of a new car averaged over $35 thousand, but that might have been the pinnacle. Those in the automotive industry warn that it might be time for car dealerships to hold onto their hats. According to financial analysts, there may be a bumpy ride ahead as there is likely a recession coming into the industry. Economic forecasters are warning that a recession, tantamount to 2008-2010, might be on its way.

Adding insult to injury, things like the rideshare phenomenon will be the second strike that might knock car dealerships off their winning streak. Already seeing the doom and gloom on the horizon, smaller Abbotsford car dealership lots have closed their doors, sold off their inventory, and decided to move along.

That begs that question whether it is just the little guy who will get squeezed out of the market or if the car dealership as we know it will be a thing of the past. With so many other buying options, are those dealerships who choose to maintain their brick and mortar be able to weather the dwindling car sale storm, if it heads this way?

Strike one to the industry.

The popularity of ridesharing is not only green, but it is economical to people who don’t want to have to maintain a car, pay for the gasoline, and, in populated areas, worry about parking. It makes much more sense to upload an app to find someone to ride with and let them pay for the costs that come with car ownership.

Some forecasters that believe that groups of people will buy into autonomous cars together, and will not only share the ride but the car, meaning that as many as six or more people can own one car instead of six individuals having their own. It is easy to see how that might cause a dent in the car sales market.

Strike two to the industry.

The internet has given car buyers a new option to avoid the brick and mortar dealership. Often, those selling on the internet can offer a lower price to the consumer because they aren’t paying for all the costs that it takes to run a walk-in dealership.

By eliminating the middleman, car manufacturers like Tesla have decided to not only build their car but to market and sell them to the public without a dealership.

Although not available in many states, you likely can’t stop this growing tide; if the internet becomes a viable way to sell cars for manufacturers, then there will be no need for the cost of running, owning, or operating a car dealership. Why waste all so much capital when you can sell your products by having the consumer merely point and click?

Strike three to the industry.

Autonomous cars might be the final strike for car dealerships. With fleet cars that can operate themselves, it is likely that people will opt not to pay for maintenance and a car payment. It is predicted that there will be fleets of cars that will spend their day dropping off and picking up.

If someone can get a car where they want, and at any time they want it, there is really no reason to pay for your own automobile. There is no sense in paying for a car if you have other options to get you from point A to point B without the headache of ownership.

Although the previous three years have seen a boom in the car industry and dealerships have been riding high, that boom might be about to crash. With so many other options for both buying a car and finding a ride when you need one without ownership, car dealerships might be a thing of the past before we know it.

Autonomous cars might be the final strike to make car dealerships all but obsolete. But, the car buyer is nothing if they are not unpredictable; so, what the future will bring is just as unpredictable for the car buying industry.

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