It’s been an up and down ride, folks. What’s happened so far in 2018 has stirred up the automotive industry, from the sales floor to the wash bay. And with it, there have been lessons to learn and information to glean.

Steel Tariffs

In March this year, President Trump announced his intention to levy tariffs against steel and aluminum imports. It caused an uproar in automotive where the effects would be felt on new vehicle pricing, parts manufacturing, and overall demand. In the first five months alone, more than $1.4 billion dollars in revenue was created, but at the potential detriment to the automotive industry. I won’t beat this to death – God knows that’s been done enough already.

But what did steel and aluminum tariffs teach the automotive industry? Once again, this adversity proved how resilient retail automotive is, even through uncertainty.

NAFTA Negotiations

Like steel tariffs, potential auto tariffs have been dangled over NAFTA countries’ heads, like an ax waiting to fall. It’s the uncertainty that’s generated in the NAFTA negotiations that make manufacturers and customers wonder alike: will tariffs decrease consumer demand, raise vehicle prices substantially, or both?

We’ve come through NAFTA talks – now USMCA – a little worse for wear, but in better shape than expected by many. With barely any effect on the automotive landscape, the industry keeps on trucking.

Tesla Woes

The spotlight has been on Elon Musk for years now, trying to turn Tesla into a profitable electric car company. That may happen yet someday, but Tesla production lines struggled mightily to achieve their weekly targets until recently.

What we see from the Tesla situation is evidence of customer loyalty. It demonstrates that car buyers are less likely than ever, on average, to buy a car on a whim. They’ll even pay a deposit and wait more than a year if it’s a product they believe in.

Electric Car Announcements

Aside from Tesla, 2018 started out with buzz about electric cars becoming mainstream in the coming years. While manufacturers like Volvo, Volkswagen, Jaguar, Lucid, Chevrolet, and Toyota are committed to developing electric vehicles for the everyday driver, very few have been produced for the masses. Instead, EVs continue to be premium models targeting the elite.

Slow adoption is partially the fault of the carmakers, but it also shows that car buyers are less willing to adopt new technology quickly. The concept and benefits may be intriguing and attractive, but car buyers are more conservative than they say they are.

There’s Still Only One Sure Thing in Retail Automotive

So far, 2018 has seen an uptick in dealers and manufacturers who see the important role fixed ops plays in everyday automotive retail life. Variables that affect car sales and the uncertainty of a volatile US economy drive home why fixed operations need to be a focus.

It’s all but guaranteed that every morning, at dealerships across the nation, customers line up their cars for service appointments. These customers are an opportunity to increase loyalty and drive repeat sales. But ultimately, it’s the profit the fixed operations departments generate that keep the dealership’s lights on, the dealership staff paid, and the sales department fueled with buyers.

While the variable operations are sensitive to economic, natural, and political changes, the fixed operations side is much less so. Spend resources – time and money – on fixed operations to keep your dealership competitive and profitable, no matter what’s going on around you.