The rise of the internet and online shopping seemed to signal the ignoble end to the ubiquitous car dealership in the 1990s.
Those gloomy predictions from industry watchers turned out to be wrong; consumers continued to flock to dealerships, which largely carried on despite the critics. Then the COVID-19 pandemic hit, closing showrooms, sending sales teams home and driving consumers online to purchase vehicles.
Insiders again sounded the alarms that dealerships would not survive. In reality, the exact opposite happened.
The pandemic has been a boon for U.S. dealers, which reported record profits in 2020 even with reduced staff and a national recession. Nearly 30% of U.S. new car sales last year were completed online, according to Alan Haig, an automotive retail consultant and president of Haig Partners. Before the pandemic, less than 2% of vehicles were purchased digitally.
“This shift to digital retail is positive for dealers who embrace it,” Haig told ABC News. “For those that don’t, they will lose customers and be harmed by the trend.”
Dealerships moved quickly to stave off online competitors and rehabilitate their poor customer service rap. There were 16,623 franchised new vehicle dealerships at the end of 2020, according to the National Automobile Dealers Association, and more than 1.1 million workers are employed in the sector.
The retail experience was “ripe for change” but dealerships are not going away, according to Michelle Krebs, an executive analyst at Cox…
