In January, I wrote about trends on the horizon this year for auto dealerships.
The list included several things that, indeed, are still playing out — the continued blending of online and in-store transactions, using technology to build trust with consumers, build-to-order sales models and tightening standards for cybersecurity and data privacy.
As we looked back through our coverage of retail technology this year, all of those trends appeared on our pages and in this newsletter. The ongoing inventory shortage meant dealerships — and wholesale auction providers, too — had to get creative about how they sold and sourced vehicles.
2022 brought high-profile mergers and acquisitions, from online used-vehicle retailer Carvana's $2.2 billion purchase of the ADESA U.S. physical wholesale auction unit to dealership technology giant CDK Global Inc. being acquired by investment firm Brookfield Business Partners.
What we didn't anticipate in January was the extent to which a softening economy would affect the industry, particularly the digital used-vehicle retailers. Rising inflation and, in turn, rising interest rates, along with high vehicle prices and still-constrained supply, all conspired to tamp down demand. That had a sharp effect on Carvana, Vroom and Shift Technologies, all of which struggled this year to contain financial losses.
Here is our list of the top 10 retail technology stories of 2022:
1. Online used-vehicle retailers Carvana, Vroom and Shift Technologies were rocked by turmoil, posting quarterly losses and burning through cash as the companies navigated softening consumer demand and rising interest rates.
2. Dealership technology company CDK Global Inc. was sold to investment firm Brookfield Business Partners in a transaction topping $8 billion, taking the formerly publicly traded company private and giving it a new CEO in Brian MacDonald.
3. KAR Global sold its ADESA U.S. physical auction unit to Carvana in a $2.2 billion deal that gave Carvana more physical reconditioning capacity and allowed KAR to focus on its remaining digital businesses.
4. Former Reynolds and Reynolds CEO Bob Brockman died at age 81 while awaiting trial on federal charges of tax evasion, wire fraud and other crimes.
5. Carvana faced regulatory scrutiny in multiple states over issues with titling and registration.
6. Dealership management system provider Reynolds and Reynolds Co. elevated executives to new roles and vowed to take a more public-facing role in the industry while working to improve its relationships with dealership customers.
7. Automakers' interest in over-the-air updates, subscription features and vehicle reservations had some state dealer associations working to revise their dealership franchise laws in response.
8. The Federal Trade Commission extended for six months the deadline to comply with the revised Safeguards Rule, which outlines how financial institutions, including auto dealerships, must protect consumer data.
9. Dealerships increasingly turned to technology to help acquire used cars during a shortage of new vehicles that, in turn, created a shortage of nearly new units returning to stores' used lots.
10. Online auctions and digital vehicle acquisition channels prompted traditional wholesale auction providers to adapt their own business models.
Thank you for reading this year. Have a happy holiday season, and we'll see you in 2023.
