Pub. 16 2017-2018 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 2 , 2 0 1 7 22 new jersey auto retailer L ast night I had a terrifying, ex- hausting nightmare. I dreamed that the automobile dealer was on the verge of extinction. Automotive retailing, the em- bodiment of American entrepreneurial success, was about to be crushed by the same technology that has already bulldozed other stalwarts of our way of life from department stores to newspapers. It snuck up on unsuspecting dealers much like the proverbial frog that jumps into warmwater not realizing, as the temperature rises, that it’s about to be boiled to death. My dream began with a landscape pock- marked with empty collision shops as buyers flocked to safer cars with collision avoidance technology and lane departure systems. That led to fewer crack-ups and less need for repairs. Collision shops were the victims. That was only the harbinger of what was to follow. Here and there, independent stores started to shutter their doors. Technologically-lad- en new cars became more expensive and obsolete, older, used car values collapsed. Since used cars are usually the primary down payment on newer models, that currency was devalued and fewer new cars were sold. Less gross, reduced F&I, and contracting service and parts margins, led to smaller dealerships succumbing to the inevitable. Other conventional dealerships stood empty as newmanufacturers invaded their markets with eclectically- powered and technologically-advanced cars sold directly to consumers. These newcomers, like Far- aday Mobility Company (remember this is only a dream), scoffed at franchise laws and built factory-owned outlets. As more copies were sold, economies of scale made them cheaper and ever more accessible to consumers. Consequently, their invasion of what had been legally protected markets stole business from traditional dealers and more dealerships folded. Even surviving dealerships were stuck with a surplus of repair bays and service over- capacity. OEM’s did rise to the challenge My Nightmare: A Dystopian Future Where The Dealership Dies A Painful Death BY SHELDON SANDLER