Deep challenges facing dealerships in the not too distant future, author and analyst says

Dale Pollak
Dale Pollak

Auto industry analyst and consultant Dale Pollak did not plan to write another book, but the deep and potentially disruptive challenges facing dealerships prompted him to once again take up the pen.

Pollak is the founder of vAuto in Oakbrook Terrace, Illinois, which provides technology, tools and business intelligence to thousands of dealerships across the United States and Canada. His latest book, "Like I See It: Obstacles and Opportunities Shaping the Future of Retail Automotive," is available on Amazon.

In "Like I See It," Pollak devotes chapters to margin compression, increased original equipment manufacturer (OEM) control and financial reliance of dealer partners, dealer network consolidation, technology disruption, vehicle production inefficiencies and consumer preferences for digital retailing.

"I undertook the book because I have sensed, in recent years, that dealers and others in the retail automotive industry aren’t paying sufficient attention to key challenges facing our business," Pollak told Mega Dealer News. "The book attempts to address these challenges."

"They include margin compression, which is working like a cancer, eating away at dealers’ bottom lines." Pollak said. Margin compression is where costs rise faster than the prices received from sales.

"I also discuss how dealers have become overly reliant on factory bonus money to support their new vehicle operations and profitability," Pollak said. "In fact, without this OEM money, we’d have far fewer dealers who are financially viable as retailers."

Pollak said he also explores the growing expectations among vehicle buyers for a much more convenient and transparent vehicle purchasing experience.

"It wasn’t too long ago that dealers fought the advance of the internet and the transparency it brings to vehicle availability and pricing," he said. "In some cases, dealers refused to even post vehicle prices online because they wanted to retain control of every aspect of the purchase process.

"Times are changing fast, and I devote a chapter to helping dealers understand why they must embrace the concept of 'digital retailing' before they lose their opportunity to do so," he said.

A key problem he addresses is the hiring and, crucially, the retention of employees, arguing that "it is no secret that dealers suffer from chronic turnover in their sales departments."

"This amounts to an expensive inefficiency that ultimately drags down a dealer’s ability to reach his/her full operational performance and profitability," Pollak said.

Pollak also takes a look at the near future, including changes to vehicle ownership models and the rise of autonomous vehicles.

"Taken together, these trends will cause a high degree of disruption that could imperil the dealer network as we know it today," he said.

"Much of the book could be summarized by a single idea: that dealers and other retail automotive stakeholders need to become much more efficient and collaborative in the way they conduct their business if they want to remain prosperous participants in the car business in the not too distant future," Pollak said.

On a more personal note, Pollak said, the book reflects his "dedication to and passion for the car business. I grew up in a dealer family. I worked as a dealer.

"Today, I’m blessed with the opportunity to share my perspective with dealers across the country every day," he told Mega Dealer News.

"It may sound corny, but I truly felt an obligation and responsibility to write the book and do my part to help dealers prepare for and address the obstacles and opportunities that lie ahead in our shared business."

Want to get notified whenever we write about vAuto ?
Next time we write about vAuto, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.
Organizations in this story

vAuto 1901 S Meyers Rd Oakbrook Terrace, IL 60181