The automotive retail landscape is experiencing unprecedented challenges. While the industry shows signs of growth, with new vehicle sales expected to reach 16.3 million units in 2025, many dealerships are struggling with internal issues that threaten their bottom line.
The Process Problem
Today’s dealerships face a perfect storm of operational inefficiencies. Dealer sentiment has declined significantly, reflecting growing concerns about rising costs and economic uncertainty. But the real story isn’t just about external pressures – it’s about what’s happening inside dealership walls.
The traditional sales process, once a well-oiled machine, has become a labyrinth of missed opportunities and lost deals. Customer expectations have evolved, but many dealerships remain stuck in pre-pandemic patterns, creating friction in the buying journey.
Sales staff have gone from providing solutions, customer care and being proactive to predominately order takers. Sales staff have lost their ability to sell according to a lot of dealers. When we spoke to many of them the sales process was at best erratic and lacked process with most salesman generally not even following up customer enquiries.
The average purchaser these days have so much information and options available to them at a glance which in then lies the issue with many dealerships lacking process and systems to maintain the level of contact with customers whether it’s the initial contact or remarketing to increase sales opportunities. With today’s customer you have 2 hrs to engage with and if the client hasn’t seen your brand more than 32 times in 24hrs will forget you even quicker.
The Post-COVID Sales Force Crisis
Perhaps the most alarming trend is the deterioration of sales force quality since the pandemic. According to recent industry data, dealership employee turnover has reached a staggering 46%, creating a constant cycle of inexperience and training gaps. This revolving door costs the average dealership approximately $500,000 annually.
The skills gap is particularly concerning. Many seasoned professionals left the industry during COVID-19, replaced by less experienced staff who haven’t received the same level of traditional sales training. The average dealership headcount only increased from 71 to 74 individuals after a 10% reduction during COVID-19, suggesting that dealers are struggling to both attract and retain quality talent.
The Commission Conundrum
A more troubling development is the emergence of unauthorized commission arrangements. While exact statistics are difficult to verify, industry insiders report that a significant percentage of sales staff have developed side arrangements with finance brokers and competing dealerships. These unofficial referral networks not only violate most dealership policies but also create serious conflicts of interest that can harm both the business and customers.
This practice, sometimes known as “bird-dogging” in industry parlance, can result in fines and license suspensions when discovered. Yet it persists, driven by sales staff seeking to maximize their income through whatever means available.
The Technology Solution
Forward-thinking dealerships are fighting back with technology and training. The global auto dealership CRM software market is expected to grow from $5.52 billion in 2023 to $6.13 billion in 2024, reflecting a massive push toward better process control and customer management.
These investments are paying off. Dealerships that implement comprehensive CRM solutions see an average 29% increase in sales and a 34% increase in productivity. Modern CRM systems do more than track customers – they provide accountability, process automation, and detailed analytics that help identify and correct inefficiencies in the sales process.
In an ever changing global market and technology many of the current DMS systems have become more of an invoicing tool rather than a CRM. With a strong emphasis on AI becoming the new standard there are few systems that have adopted this in a consolidated platform. Our research team evaluated several and found that the Genius Marketing Solutions Platform is the best for its functionality and also the price. Visit www.geniusplatform.com.au for more information.
The Path Forward
The solution to these challenges requires a multi-faceted approach:
- Implementing robust CRM systems with clear accountability measures
- Investing in comprehensive sales training programs that address modern buying behaviors
- Creating transparent commission structures that discourage unauthorized side arrangements
- Establishing clear processes that prioritize customer experience over quick sales
The automotive retail sector stands at a crossroads. Those dealerships willing to invest in proper controls, training, and technology will likely thrive in the evolving market. Those that don’t risk falling further behind, losing not just deals but their competitive edge in an increasingly challenging marketplace.
As the industry moves toward 2025, the winners will be those who recognize that success isn’t just about having the right inventory – it’s about having the right processes, people, and technology to serve today’s sophisticated car buyer.
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