It's a great time to be an auto dealer.
Demand for new and used vehicles is outstripping supply, and consumers are paying full price — or more — for popular models. Vehicle margins are sky high and service business is coming back. Tight inventories are saving dealers on floorplan and marketing costs, pushing profits even higher.
It's also an unsettling time to be an auto dealer.
Beyond the daily challenge of securing sufficient inventory and wooing back workers, the long-term prospects of the industry are fraught with uncertainty as the franchise model faces new pressures.
Once the current frenzy of supply and demand straightens out, the underlying tensions in the dealer community that were simmering pre-pandemic will return with greater force. They include a revolutionary shift toward electric vehicles, digital sales and direct-to-consumer transactions.
As automakers adapt to those industry shifts, some retailers worry that the new vehicles and sales programs being pushed by the manufacturers are encroaching on their role as franchised dealers.