EFG Companies shares recommendations & second-half outlook
Dealerships and finance companies currently might be encountering unique circumstances, but EFG Companies recommends that they approach the current automotive retail and financing landscapes with a strategy that’s likely worked for decades.
The provider of consumer protection programs for vehicles said through a news release that it sees several market opportunities in the second half of year for the retail automotive, powersports, and F&I industries. But EFG Companies recommends caution due to market volatility, continued supply chain and product inventory issues and challenges to consumer financial strength.
Company leaders also suggest that dealer principals, agents and finance companies approach the remainder of the year strategically focused on implementing customer-first sales methods, optimizing inventory with value-driven products, and implementing training to ensure employee effectiveness and regulatory compliance.
“While there are many factors at play, smart business owners will stay strategically focused on those tasks which align with the needs of consumers while advancing their businesses in post-COVID sales models,” EFG Companies chief revenue officer Eric Fifield said in the news release.
“The new normal is now, and consumers have clearly shown how they want to do business. Regardless of how economic factors play out, there remain numerous opportunities for revenue in the remainder of 2022,” continued Fifield, who elaborated more about the current market in this online video.
Fifield and other executives from EFG Companies emphasized that consumers continue to look for added value in their automotive and powersports purchases. They explained this various segments this way:
Embracing new approaches to drive revenue growth for retail automotive dealers
EFG companies said post-COVID strong consumer financial positions, favorable credit terms and pent-up demand all spell revenue opportunities for dealer principals in the second half of 2022.
“Dealers who embrace new selling models, train and support their sales teams, and are mindful of regulatory scrutiny will capture the sale versus others who pine for the return of the old days,” executives said.
Growth in off-road, personal watercraft sales equals opportunities for powersports dealers
EFG Companies pointed out that consumers are anxious for adventure, and dealers with off-road or personal watercraft units who have successfully implemented online sales models with supporting F&I products and suitable margins will fare better than businesses who focus solely on front-end gross.
Agents making vehicles more marketable can deliver win-win opportunities
EFG Companies said agents will need to “flex different muscles” to provide heavier engagement as dealers adjust their operations for continued growth.
“Those with the right focus and service offering to help tackle current dealership challenges will be better positioned to generate more dealership revenue, attract new clients, and boost service retention business across the board,” executives said.
Finance companies delivering greater protection should produce greater value
EFG Companies emphasized that customer-focused finance companies can capture valuable auto paper through affordable protection products that retain vehicle value while differentiating themselves.
“While economic uncertainty persists, and unpredictable supply chain and inventory challenges could introduce added volatility, dealers, agents, and lenders who strategically focus on meeting customer needs while maximizing employee effectiveness will be best positioned for a profitable 2022,” executives said.