Plunging new-vehicle department profits, concerns about disruption and changes to how consumers buy, changing factory-dealer relations, stair-step incentive programs, and hopes for new technologies and businesses have some dealers wrestling with their future in auto retail.
It has led some successful dealership owners to exit or to largely reduce their stake in traditional dealerships.
Take Bernie Moreno and the Gile family, two successful dealership owners in the Cleveland suburbs. While their reasons for distancing themselves from traditional auto retail vary, both Moreno and the Giles concluded they could sell some of their stores now and move in a new direction — one they hope will provide for future generations.
A year ago, Presidio Group, a San Francisco buy-sell advisory firm, began telling its clients to either develop a 20-year plan to thrive in a changing auto retail landscape or consider selling their stores. And this year, the McKinsey Center for Future Mobility, a division of McKinsey & Co., in a study recommended dealerships take different approaches to prepare for the future such as focusing on luxury brands in tier-two cities or expanding geographic scale.