Insights

Rebate and tariff issues had considerable effects on the auto industry early in 2025 and there’s more to come. Read our Quarterly Report to see how it’s all playing out.

Quarterly report: a roller-coaster ride for the start of 2025 

We’ve made it into the second quarter of 2025; and to say that the first three months of the year were a roller-coaster is definitely an understatement. Even now, we’re not confident enough expect that everything we’re writing now will still be the same by the time you read it. So, we’ll look back on what did happen in the first quarter of 2025, and offer some insight on what might happen in the second.

Vehicle sales in Canada

DesRosiers estimates that 185,000 new vehicles were sold in Canada in March 2025, an increase of 11.4% from March of 2024, and the highest March sales since 2018. That puts the SAAR (seasonally adjusted annualized rate) at a very healthy 2.02 million, “broadly in line with February and a number that the industry would love to see repeated over and over again,” DesRosiers said.

Over the entire first quarter, Canadian sales were almost 425,000 vehicles, marking a 2.8% increase compared to the first quarter of 2024. Light trucks accounted for 88.1% of that, with passenger cars well behind at 11.9%. General Motors had the highest sales volume for the quarter at 74,000 units, an increase of 17.3% year-over-year. Luxury brands also did well, with Lexus up 17.6%; BMW up 13.5%; and Mercedes-Benz up 12.8%, although these percentages are compared to relatively soft sales last year.

The ZEV market in Canada

Zero-emission vehicles – EVs and PHEVs – had a tumultuous ride in the first quarter. In January, the federal government paused its “green” rebate of up to $5,000, ahead of its planned end date on March 31, 2025. This prompted several automakers to offer equivalent discounts to customers on its EVs for the month.

Quebec was already winding down its rebate program, dropping the amount from $7,000 to $4,000 at the beginning of 2025, and then planning for $2,000 at the start of 2026 and to end it entirely by 2027. But it temporarily suspended its program on February 1, 2025 until the end of March, and the $4,000 payment isn’t retroactive for customers who registered new EVs during that time. The program returned on April 1, 2025.

British Columbia also paused its rebates in January, when funds ran out due to a large number of EVs being registered, but later reinstated it. Some provinces, including Quebec, Alberta, and Saskatchewan, placed extra annual registration fees on EVs, saying their owners don’t contribute to road maintenance because they don’t pay gasoline taxes.

Likely due to the lack of rebates, ZEV sales across Canada in January were one-third of what they’d been in December 2024, according to S&P Global Mobility. ZEV penetration rate – the percentage of EVs and PHEVs among total vehicle sales – was an average of 15.4% in 2024. It rose to 18.9% in the final quarter of 2024, mostly as Quebecers rushed to get the $7,000 rebate before it fell to $4,000. Throughout 2024, Quebecers bought 54% of all ZEVs sold across Canada; and in the last quarter of 2024, 42% of all vehicles sold in Quebec were ZEVs. Then, in January of 2025, Canada’s ZEV penetration rate fell to just 13.3%.

Tesla ended up mired in controversy in March, when the federal government froze $43.2 million in rebates to it, pending an investigation. That amount covered 8,669 EV rebate claims Tesla filed over just three days in January, right before the Canadian government paused its rebate program and closed the online dealer claims portal. That left about 200 dealers from other brands with more than $10 million in outstanding rebate payments. In March, several provinces and territories announced Tesla vehicles were no longer eligible for their rebates.

DesRosiers reports that while ZEV sales saw a modest uptick in March 2025 compared with February, “sales however remain well below their 2024 highs; it will be interesting to see how sales progress with the return of Quebec incentives in April.” Other issues that may potentially affect ZEV sales include the end of the carbon tax, lower gasoline prices, and tariffs. That last issue could even have long-term effects on the new battery plants and supply chains currently in the works by companies in Canada.

Vehicle production figures

For February, the last month for figures from DesRosiers, vehicle production in Canada, the U.S., and Mexico was 1,297,903 vehicles; and that was down 5.7% from the same period in 2024. Passenger car production took the largest hit, falling 13.7%; while light trucks, which includes SUVs, fell by only 3.8%. Light trucks now account for 82.5% of all vehicles built in the three countries, up from 82.0% during the same period in 2024.

In February, the U.S. built 871,886 vehicles, accounting for 67.2% of all light-vehicle production in North America. Mexico was next with 317,171; while Canada trailed at 108,846, accounting for 8.4% of all production.

Measuring sales per dealer in 2024

DesRosiers also charts dealer sales in Canada, with last year’s figures being the latest available. In 2024, there were 3,734 dealer franchises in Canada, up from 3,714 the year before. Sales per dealer also increased, finishing 2024 with an average of 483 vehicles per dealer, up from 448 in 2023, and from 401 in 2022. Toyota and Lexus had the highest number of sales per dealer, at 847 and 743 respectively. In order, Subaru, Audi, Ford, General Motors, Mercedes-Benz, BMW, Hyundai, and Volkswagen dealers rounded out the top ten.

Looking forward into 2025

As we mentioned earlier, our crystal ball is pretty much out of commission this time around. The White House has demonstrated it can change its trade policies almost overnight, creating massive uncertainty and insecurity in an auto industry that’s now global, regardless of a vehicle’s final assembly.

Beyond auto tariffs, any placed on other goods can further affect the Canadian economy and squeeze consumers. If new-vehicle prices rise, used-car prices will undoubtedly follow them, and we could potentially see similar used-vehicle situations as we did during the microchip shortages. Other uncertainties that may affect the industry and dealers include the federal election, gas prices, EV rebates, and even just the general mood of consumers as they react to everything. As the saying goes, fasten your seatbelts, because it’s going to be a bumpy ride.

No matter how hard you try, you can’t make everyone happy. How do you handle angry customers to everyone’s satisfaction?

The reality of running a car dealership – or any business, for that matter – is that occasionally you are going to get an angry customer. That degree of anger may be even higher for you, because you’re selling (and servicing) one of their largest purchases, and one they depend on daily for mobility.

Everyone in your dealership should know how to handle an angry customer, including how to deescalate the situation and how to work towards a solution.

What are the warning signs you should watch for?

Not every angry customer comes in that way, and in many cases, the situation builds gradually. Watch for signs that things are starting to go sideways, which can give you a better chance of defusing the situation early.

• Get involved right away if someone comes in asking to see a manager. Handing them over to anyone else is going to make them angrier. If a manager is not immediately available, don’t let the customer wait in the showroom. Get them settled into an office, offer a coffee, and get a manager to them as soon as possible.
• People tend to get more worked up as they think about the issue. Watch for people who progressively speak louder or faster, get red-faced, breathe harder, or start to add profanities. Step in to calm things down.
• All of this might start in the parking lot. Keep an eye out for people who drive in aggressively or slam their doors. Meet them at the door and bring them inside into an office right away.

How do you deescalate a situation?

People usually take their cues from others, including when they’re angry. Conflict escalates when both sides are behaving badly, but the tension can tone down when one person is calm and collected. It is vital that you be the calming factor in the situation.

• Don’t tell someone, “I know how you feel,” because you don’t. Instead, say something like, “I can see why you’re not happy with us. Let’s start at the beginning and try to come to a solution.”
• Let the customer explain the issue without interruption, unless it’s necessary. If they’re getting too worked up, interject with something like, “I see why this is a problem. Keep going.” That little blip in the conversation may help your customer to focus on the issue, rather than the anger.
• Pay full attention. Look your customer in the eye, and focus everything on what that person is saying. If you need to look something up, raise a finger and say, “Hang on just a moment, let me take note of that right now.” Do it quickly and then let the customer continue.
• Apologize for the issue, even if you weren’t involved. “I’m sorry this happened to you. I’m going to try to make this right.”
• Choose your words carefully. Rather than something like “chill out,” which tends to make people more upset, try something like, “Let’s step back a bit and see how we can work this out.”

What steps should you go through?

Let the customer finish with the full complaint. If you don’t, they will stay on a slow boil, and possibly think you’re trying to get out of solving the issue. In many cases, especially if you’ve remained very calm, the customer will now be willing to listen to you and see how you intend to fix the issue.

• Start again from the beginning, but this time, you control the conversation. “So, you said the salesperson didn’t do what you expected. How should we have handled it right then?” Now you have a starting point for how you might be able to come to a solution.
• Go back to points the customer might have glossed over in anger. “You only said the salesperson didn’t treat you properly. What exactly happened when you came to get your vehicle?”
• Use your judgement when determining if you should include employees who were involved in the original issue. If it would help to figure out what happened, bring everyone together; but avoid a situation that will just turn into another argument between them and the customer.
• Let the customer know what you can and can’t do to fix the problem. This can avoid the customer demanding something that isn’t viable for you to provide.
• If it’s possible under the circumstances, offer more than one solution, and then let the customer decide which is preferable. That provides the customer with a level of control that puts them back in charge, which can increase their satisfaction with how you handled it.
• Once you and the customer have decided on a solution, implement it immediately. If it’s going to take time, update the customer daily, even if it’s just to say, “We’re still waiting for the solution to go through, but I wanted to let you know this hasn’t been forgotten.”
• After the problem is resolved, follow up in a few days to make sure the solution was as promised and the customer is satisfied with it.

Some additional thoughts

• After you’ve dealt with an angry customer, go over it with your staff. Look at why the customer was upset, and what can be done in future to help prevent it from happening again. Also go over the steps you took for resolution. Try to see if there was something that could have been done better to resolve the problem sooner. As for the steps that went well, incorporate them into your program when teaching employees how to deal with issues.
• Despite that well-known saying, the customer isn’t always right. In some cases, you have to confirm that the issue can’t be solved to the customer’s satisfaction. Calmly explain exactly why; and if possible, offer something else you could do in place of what the customer wants.
• It’s extremely rare, but sometimes a customer will be angry enough to cause physical or property damage. If this happens, get everyone out of the way and call police. You have a responsibility to your staff as well as to your customers, and you must do your best for all.

It’s been said that if you do well by your employees, they’ll do well by you. It can often be difficult to find good workers, and often equally difficult to retain them. Perks and rewards can go a long way if they’re done right, and in the long run, they can potentially save you the expense and time required to hire and train new people for your store.

What is the point of perks?

In the past, bosses might have said, “I pay them and that’s all they’re owed,” but that’s no longer the case. Employers realize that job perks and rewards aren’t just a carrot to dangle in front of people. Adding them in addition to appropriate wages not only helps to retain employees, but can improve performance and confidence, raise morale, and encourage employees to work together for the benefit of the dealerships and its customers.

When you look at the various lists of “Best Dealerships to Work For” published by a number of associations and publications, you’ll usually find that employee benefits are mentioned consistently among the leading dealers listed.

Are all benefits tangible?

Not all perks are necessarily something employees can hold in their hands. Dealers should consider motivational reward opportunities. In addition to a paycheque, employees are looking for career growth, both at a personal level and within the organization.

Obviously, there are limitations in a dealership, and employees shouldn’t expect to be able to move as often or as far as they potentially might in a large corporation; but there still should be advancement opportunities and titles for those willing to work toward them.

A major benefit is offering training programs, which allows people to improve their skills. A progressive program that gets more in-depth as trainees meet each level of proficiency offers its own rewards: better skills along with the satisfaction of reaching each individual training goal. All of this can result in improved customer service and more sales, which in turn can increase commissions and bonuses for salespeople.

What about events and programs?

Of course, there’s value in tangible benefits, especially since that’s what employees are most likely to recognize as a perk. Health and wellness are important to people, and some larger dealerships have even installed on-site gyms for their employees. While that won’t be an option for most stores, full or partially-paid memberships at a nearby gym might be a much-appreciated perk, and the percentage of the dealership’s payment for it could be tied in to sales objectives. Dealerships can be high-stress environments, and gym visits or fitness classes are not only good for the body but for the mind as well, as exercise is a proven factor in helping to relieve stress.

Hosting barbecues or lunches for everyone is popular, especially if all departments can get in on it – after all, a dealership’s sales depend on good service, and service depends on good sales. These could be catered, or supplied by a food truck that comes in for that purpose. Golf tournaments also tend to be a solid hit with many, but of course not everyone plays the game, so also consider something like a bowling night or an evening at the go-kart track, or entertainment events such as a comedy-night show.

What about team-building events?

Many businesses take their employees to team-building events, either informal ones or those run by professional companies specializing in it. This could be anything from games or painting classes, to activities such as paintball, escape rooms, a spa, rock-wall climbing, or even overnight camping.

The trick here is to “read the room” and determine if people are truly interested and are looking forward to it, or if they don’t want to do it but also don’t want to be “that person” who isn’t a team player and so they reluctantly go along. Dealership hours can be long, and many people want to spend their time off with family or friends, not with the coworkers they’re already alongside most of the time at the store.

Could you offer financial investment rewards?

Some dealerships have set up Registered Retirement Savings Plan (RRSP) programs where employees make contributions and the dealership matches it. These are often tied to the length of employment, including a minimum number of years the employee must stay; or dealership contributions that rise after a number of years, such as an increase at the five- or ten-year mark.

Such a program would be especially beneficial for younger employees, and could potentially be opened to include Registered Education Savings Plans (RESP) for their young children, or a First Home Savings Account (FHSA), if applicable. While it would mean a cash outlay for the dealership, it could be a very strong incentive for an employee to stick around, especially if it’s combined with training programs and advancement opportunities that could instill a true desire to maintain a career at the dealership.

What about a benefits program?

Dealers might look into benefits plans for employees, such as those that cover prescriptions, eyeglasses, dental, and other expenses. These could potentially be supplied to top-performing salespeople as an incentive, or partially with employees paying a reduced rate for the plan. The cost to the dealer is a concern, of course; but it could be a tremendous incentive for employees to stay on board and perform at their best.

Summing up…

Every employee you hire is going to cost you money in onboarding and training, and every employee who leaves will take that with them, and you’ll start over again with their replacement. Implementing perks and benefits for your staff requires time and money, but in the long run, it could potentially save you far more of both, and improve everyone’s performance for the benefit of the dealership and the customers it serves.

It’s Auto Show season – are you tying into it and making the most of it for your customers?

A new year brings new vehicles, and new vehicles bring auto shows. While it took some time and a lot of work to get the momentum going again after the pandemic shutdowns, the shows are back and they’re proving as popular as ever with the public. In 2024, both the Toronto Auto Show and Vancouver Auto Show set all-time records for attendance, while the Montreal International Auto Show saw a double-digit percentage rise over the year before.

There is excitement around the shows, and dealers could see some success in grabbing that energy and conveying it to their customers. It doesn’t even need to be a major show, if there’s not one in your area; there could be other event opportunities to get people looking at what you have to offer.

Should you be attending auto shows?

If there’s a show in your area, you and your staff should make an effort to visit during the public days. If your OEM has a display, it’s an opportunity to see how the vehicles are being marketed, and perhaps talk to brand representatives you haven’t met before – or catch up with those you have.

You can also get a firsthand look at competition brands, and that’s invaluable. It’s one thing to see photos or read reviews of what they’re offering; it’s entirely another to walk around the vehicles, sit in them, and see what they’re all about. If test-drives are available, take them out for a spin. The more you know about your competitors’ vehicles, the more ammunition you have when you’re talking to customers about the benefits of the vehicles you sell.

Should you be working at auto shows?

Depending on the show, dealerships are often encouraged to send representatives to do a stint “on the floor” talking to attendees and answering their questions. It’s not exactly glamorous, but it’s a good opportunity to gather contacts. Beyond that, it’s a great way to see what consumers are interested in when they’re looking at a vehicle, which can be brought back to the dealership as a way to help guide your customers through their shopping journey.

How do you “bring the auto show” to your dealership?

If there’s an auto show on in your district, make the most of it. Consider offering customers tickets to it, such as running a contest (if permissible) or handing them out to the first people who come into your store on a specific day.

Mention the auto show in your advertising or social media, since many people will be looking online for it and it may point some of them toward your website or social media pages. You might even consider running a “vehicle of the day” on social media, tying it into the display models at the show while encouraging people to come in and see it up close.

Again, if permissible, think about a campaign of your own, tied into the timing of the show, even if you may not be able to directly include the show itself as part of the campaign. You might consider advertising and holding a “test drive” day, putting aside some demos and either taking people out with a driver, or for a short spin of their own behind the wheel. You’ll get tire-kickers, of course, but you’ve also given them the experience of the vehicle and you have their contact information. Throw in a few snacks and some games for their children, and you might have found a winning combination. Also put your top used vehicles out front as an alternative for those who aren’t ready to move into a brand-new one.

Does it have to be an auto show?

The new-car auto shows aren’t the only game in town when it comes to getting your dealership noticed by the public. Many areas host boat and RV shows – and the people who own those usually own trucks or large SUVs to tow them. See if it’s possible and worthwhile to set up a dealership display at the show; and if it isn’t, then as with an auto show, set up your own event at your dealership while the event is running.

Look at exhibitions held in your area. Agricultural exhibits, such as spring or fall fairs, usually welcome the auto displays, especially farm shows where trucks are a must-have for that industry. These fairs often open with a parade and might welcome a vehicle or two to carry dignitaries, or a truck to tow a float – with your dealership’s banner on the door, of course.

Shows and cruise nights for antique and custom cars are also very popular; and while a new-car display there isn’t going to draw much attention, you might consider sponsoring an award or putting up an advertising banner. Owners still need something to drive when their old cars are put away for winter, including a truck if they regularly take them to events on a trailer.

To wrap up…

Whether they’re going because they’re shopping for a vehicle, or just for the entertainment value, consumers enjoy auto shows and they’re attending in record numbers. Their enthusiasm can extend to you as an outlet for the industry, and it can definitely be in your favour to make the most of it. It’s an opportunity you shouldn’t let pass you by.

2024 is behind us, and here’s what the auto scene was like for Canadian dealers and consumers as we move into 2025.

Another year is in the books, and 2024 certainly was an interesting one. From the wake of the pandemic, and the microchip and vehicle shortages it spawned, we saw things start to straighten out in 2024 and move toward a more level path.

The Bank of Canada started the year with an interest rate of 5.0%, which put a damper on customer spending; but that began to drop in September, and by mid-December it was down to 3.25%. But the Canadian dollar also fell against the U.S. dollar, and in December you’d need as much as $1.44 Canadian to buy an American greenback.

Many dealers also had to handle the fallout from the CDK Global cyberattack in the summer, sending some stores back to paper and pen to sell or service vehicles. And there has been considerable political news in both Ottawa and Washington, with “we’ll have to wait and see” for the effects on the economy, trade, and tariffs.

Vehicle sales were strong during January and February, and then again in the fourth quarter. According to DesRosiers Automotive Consultants (DAC), that end-of-month surge was the result of buyers in Quebec buying zero-emission vehicles before the province cuts the rebates on them.

Canadian new-vehicle sales

DAC reports overall 2024 sales at an estimated 1.86 million vehicles, up 8.2% over the 1.72 million purchased in 2023. That’s higher than many experts expected, with many forecasting 1.77 million for the year.

That final figure is about 180,000 vehicles shy of the high we saw in 2017, even though DAC notes that from then until now, Canada’s population grew from 36.7 to 41.5 million residents.

The latest available provincial sales are from November 2024. Ontario led that month with 61,434 units, followed by Quebec at 39,686 vehicles. From there, it was British Columbia at 17,918; Alberta at 17,572; Manitoba at 4,511; Saskatchewan at 4,132; Nova Scotia at 3,689; New Brunswick at 3,396; Newfoundland at 2,597; and Prince Edward Island at 752 vehicles.

Canadian used vehicles

Canadian Black Book’s Used Vehicle Retention Index is based on its wholesale average value on two- to six-year-old vehicles as a percentage of their original MSRP. In December, the index was 135.7 points, compared to 136.2 in November; and compared to year-over-year, it was down by 7.6%. CBB said the decline in the wholesale market in the fourth quarter of 2024 was mainly due to the weakening Canadian dollar and more activity in the export market.

What’s searched and what’s sold

In early December, AutoTrader.ca reported that the top-searched used vehicles on its site, in order, were the Ford F-150, Toyota RAV4, Honda Civic, BMW 3 Series, Porsche 911, Ford Mustang, Mercedes-Benz C-Class, Honda CR-V, Chevrolet Corvette, and Toyota Tacoma.

What people actually bought wasn’t quite as aspirational. The Ford F-150 and Toyota RAV4 were also first and second on the list of the top vehicles sold, followed in order by the Ram 1500, Honda Civic, Ford Escape, Toyota Corolla, Nissan Rogue, Hyundai Elantra, and Hyundai Tucson.

The F-150 was the top vehicle searched in most regions except for Quebec, where it was topped by the Honda Civic. Of all vehicle searches across Canada on AutoTrader.ca, 49% were cars; 40% were SUVs; and 10% were for trucks. Searches for EVs were up 9% in 2024, but these only accounted for 8% of total vehicle searches on the site. Many who originally thought about an EV are now looking at gas-electric: of those EV intenders, 62% also looked at hybrids, and 60% at plug-in hybrids.

While full-year figures aren’t available yet, AutoTrader.ca reported in June that the average used-car price was $35,754, down 8.7% year-over-year; while the average new-car price was $66,550, down 1.9% from the same period in 2023.

Winners and losers in the big picture

According to DesRosiers, the market share of new-vehicle sales for light trucks hit a new record, thanks to growth in SUVs; but passenger cars fell to represent only 13.4% of total sales. Compact and subcompact SUVs enjoyed crazy growth, with compact sport-utes selling more than 560,000 vehicles. Luxury took a hit, though, significantly underperforming “as affordability issues came to the fore.”

Electrified vehicles also did well, helped by Quebec sales in the fourth quarter as mentioned, plus a number of new plug-in hybrids on the market.

DesRosiers also noted the following:

- May was the best sales month, an honour it hasn’t held since 2019; but overall, sales from March to November were mostly flat.

- General Motors led the market with more than 294,000 vehicles in 2024, partly thanks to significant sales of the Equinox EV.

- Ford was up 16.2% over 2023 and also had the largest share gain for 2024, up 1.1%. In a separate press release, Ford of Canada said it sold 279,221 vehicles in 2024; and its F-Series was the best-selling pickup in Canada for its 59th consecutive year, as well as the best-selling vehicle overall for 15 consecutive years.

- Among the larger volume brands, Volkswagen had the highest percentage sales gain at 28.2%.

- Subaru and Mazda also had strong sales growth, at 23.8% and 23.2% respectively.

Facts and figures on manufacturing

In an earlier release in December, DesRosiers noted that light-vehicle production in Canada, Mexico, and the U.S. remained flat in November with a total of 1.37 million units, down 0.1% from the year before.

In November 2023, the vehicle mix was 80.2% light trucks and 19.8% passenger cars; but in November 2024, light trucks were 82.6% of production to 17.4% of passenger cars.

During November 2024, production in the U.S. was flat, while it increased by 7.5% in Mexico, and fell by 18.6% in Canada, mostly due to plant retooling. The U.S. made 65.2% of North American vehicles that month, while Mexico accounted for 25.6%, and Canada just 9.2%.

All in all…

While it certainly didn’t set a record, 2024 finished better than many analysts had predicted, and an 8.2% gain over 2023 after some tumultuous years is stepping in the right direction. There’s always uncertainty with what a new year will bring, and this one will come with challenges, including political drama expected on both sides of the border; shrinking EV rebates and their effect on zero-emission sales; inflation and affordability; and those are just the ones we can predict. Happy New Year to all, and we’ll be back with another update three months from now.

Diversity, equity, and inclusion – known as DEI – can sometimes be a hot topic, and sometimes for all the wrong reasons. In reality, DEI hiring and practices can be an important part of your store’s success, both from the staff side and for your customers.

While DEI is undeniably important, it may sometimes be challenging to seamlessly incorporate its practices into your dealership. One of the keys is to look at it from all angles, and involve everyone in your store.

Exactly what is DEI all about?

DEI isn’t “we can only hire the guy who doesn’t look like everyone else in the dealership.” It’s a multifaceted approach to your entire store, and while it does involve your hiring policies, it also includes such things as how you approach your customers, how you advertise to them, how you build relationships, and how you operate your store to make it welcoming to people of all backgrounds.

Ideally, DEI is something you should pursue, because everyone should be welcome and encouraged at your store; and that you also want to pursue, because it’s going to improve your business internally and how it looks to your customers.

What is your advantage with DEI?

Customers who don’t always feel well-represented in many situations will be more comfortable in a diverse environment, which will translate into interest in doing business with you. If French or English are second languages for them, they may prefer to go over the intricacies of paperwork and financing in their mother tongue, even if they’re relatively fluent in their adopted language.

Once people are aware of your DEI policy, it can open your doors to far more customers. Those who are comfortable with you, including in the way they communicate with your salespeople, will send friends and relatives to you.

Some of these customers may be new Canadians and haven’t yet established a credit rating. This gives you an opportunity to walk them through your financial products that are available to them, further deepening their trust in you and your dealership.

DEI is also inclusion, which can include people with disabilities. Looking at your dealership through “inclusive eyes” can help you make any necessary changes to make it easier for everyone to access your building and services.

Where do you need to be cautious with DEI?

Establishing DEI in your dealership is essential, but there can be times when it can potentially create issues. You have to watch for them and ensure that everything is moving forward fairly.

For example, if you have a number of customers who prefer to conduct transactions in a specific language, but only certain people on your staff speak it, they may be getting a disproportionate number of customers who walk by others in the store. You need to ensure fairness with walk-ins, which might even potentially include staff sharing duties – and commissions – on a deal.

Another issue that sometimes comes up is when employees may feel that hiring or promotions are done strictly on DEI stipulations. Giving consideration to DEI doesn’t mean hiring people who aren’t qualified for the job. Let your staff know this, and work with your HR department to ensure that this is the case.

How do you get more women involved?

There is no question that dealerships are still male-dominated, and even if you want more women working in the showroom, it can be difficult to find applicants. When you are advertising positions for employees, note that your store that DEI is important and, especially, that women are encouraged to apply for positions.

You also might consider looking deeper within: It’s usually more common to find women working in the dealership offices, or sometimes on the service desk, than in the showroom. These employees might not have thought about working in sales or F&I, and might be interested in it. This can also apply to a more diverse workforce that might be “behind the scenes” in the store, and would also be good candidates for your departments.

The sales floor can often mean long hours as well, and might prove difficult for women who are primary caregivers for their children. If you can find ways to make shifts more flexible, you could attract more female candidates – as well as provide a better work-life balance for the people already working for you, which in turn helps prevent burnout.

Reaching out to your diverse audience

Make the most of your online advertising by promoting your store’s diversity on your site and on any marketplace websites. This can include a quick video showing all of your salespeople and managers with their names, and including a list of languages customers will be able to use when they come in. If there are local newspapers, or radio or television channels in languages your employees speak, advertise with them.

Making DEI work for you

Hiring people with diverse backgrounds is just the first step in DEI. You now need to keep them and to help them reach their full potential. Open dialogue is essential, and they need to know they can come to you and trust you if something isn’t working for them, if they don’t feel they’re being respected by others, or there’s a better way for them to do their jobs.

At the same time, use the diversity of your staff to your advantage. They may better understand how to reach out to people, including any unique negotiating and buying habits, or how to close a deal. There can be a lot of work involved in successfully bringing DEI into your workplace, which may also involve changing mindsets; but ultimately, it will be well worth what it takes to do it.

Used vehicles are a focus in online marketplaces, but they’re important for new vehicles too. Are you using them to their full potential and to yours?

You have an online presence, but is it reaching as many people as possible? If you’re not using online marketplaces to their full potential, you could be missing out on sales.

In addition to maintaining your own website, or being connected to your brand’s site if applicable, high visibility on marketplaces such as AutoTrader.ca, Clutch.ca, Kijiji.ca, Auto123.com, Carpages.ca and more can give you a considerable advantage.

Are you selling on both sides of the fence?

Many people think online marketplaces are only for buying and selling used cars, but that’s not the case. Not only do these sites cover both, but cross-shopping is surprisingly common. According to marketing data firm Dig Insights, almost half of those who initially visited a marketplace to shop for used cars also considered a new vehicle; while one-third intending a new vehicle checked out the used-car offerings as well. If you have both in front of them, they may be more likely to look at what you’re offering.

The same study found that 77% of used-vehicle intenders visit online marketplaces in their search, far more than those who primarily looked at dealer websites for used models. But among new-vehicle shoppers, dealer websites and online marketplaces were almost in a dead heat, and manufacturer websites were only slightly ahead of them both.

Visiting a dealership in person is still a more popular option for new-vehicle buyers than for those looking at used, but the online numbers tell an important story. You could be missing out if you’re not putting your new vehicles in front of prospective buyers as well as your used ones.

The majority of new-vehicle intenders visited online marketplaces two to five times, far fewer than the majority of used-car buyers who visited eleven times or more. Without as many chances to grab attention from new-car buyers, you have to make your listings stand out.

Advertising your new vehicles

Some customers may be getting out of an older vehicle and haven’t thoroughly checked out a factory-fresh model in quite a while. This means they may not be aware of everything now offered on them, including items that used to be optional but are now either required equipment or included on most models.

These may be mandatory rearview cameras, Apple CarPlay and Android Auto, wireless phone chargers, larger touchscreens, adaptive cruise control, emergency front braking, and more. They may be obvious to you, but not always to your customers; and these shoppers could potentially bypass your vehicle in favour of one that’s advertised with a backup camera, for example, because they’re not aware that every new vehicle has one.

Many of the mainstream vehicles with small turbo engines run on regular-grade gasoline, but again, not everyone knows that – they might associate a turbocharger primarily with a premium sports car that needs equally-premium fuel. If the engine takes 87-octane, mention it as a money-saving advantage.

If you have various trims, then, if possible, advertise at least a midrange model. You can mention farther along in the text that you also have a lower trim and its price. But if you showcase a base trim and it’s sold by the time someone arrives to look at it, they may accuse you of “bait-and-switch” tactics – and they’ll be sure to publicize that on social media, too.

Advertising your used vehicles

Of course you’re familiar with this, but as with new vehicles, list everything your used ones have, even if they seem obvious, in case shoppers don’t know what’s automatically included. Tailor your advertising to the vehicle, such as towing and payload on a truck, or cargo capacity on an SUV.

Advertising your F&I products

On both new and used vehicles, mention your products up front. That includes financing, and especially its availability for those who might have difficulty getting a loan from a bank, such as younger buyers, new Canadians, or those without top credit scores.

Outline the warranty options, including any remaining factory coverage, and the availability of extended warranty plans for peace of mind. Also mention products such as GAP insurance or maintenance service plans.

You don’t want to clutter up your ad with all the details, but a quick run-down of their availability could get people looking more closely at your offering. Don’t assume that “everyone knows all this.” Customers who haven’t bought from a dealership before, including those younger buyers and new Canadians, may not be fully aware of everything you’re able to offer them.

Presenting your vehicles

If you don’t capture your audience’s attention almost immediately on a marketplace, you’ll be swiped to the side. Have an eye-catching photo as your main draw, and then include all the details – this is their virtual walkaround, and the more you show them, the more you’ll pique their interest.

Aim for an uncluttered background in photos, and shoot in front of your store as a landmark when they’re coming to see the vehicle in person. Try to take interior shots on a cloudy day or in light shade, so you don’t get areas washed out by sunlight.

Don’t use filters or alter the background. If shoppers figure out you’ve played with the photo, they may wonder if you’ve digitally enhanced anything on the vehicle too.

If you have to use stock photos for a new vehicle, make it very clear that they are, and that the models in your showroom may have different colours or features.

And finally, switch up your products regularly to keep your marketplace site fresh. Try to have at least a couple from each segment – trucks, compact to large SUVs, cars – on your page at each time, and then rotate your stock through it.

The bottom line

Online marketplaces originally started out primarily for private sellers, but they’ve become essential tools for dealers, and they’re equally important for new vehicles as well as for used. They reach diverse viewers, but you can draw all of them in with the vehicle’s specifications, good photos, and information about your F&I products. It’s an audience that’s eager to see what you’ve got, and it’s relatively easy to give it to them and lead to a sale.

Every dealership reaches customers through various channels, but are you omnichannel? What is it, and why should you be?

Omnichannel marketing strategy isn’t new, but it is something not all dealerships have embraced, and that could be costing them business and money. Not only does it help get customers engaged and into your store, but it can reduce some of the pain points that may prevent them from recommending you to others.

Most dealers are already working with multichannel strategies, and that’s a good start, but an omnichannel approach can move you up to a new level of customer service.

What is a multichannel strategy?

As its name implies, a multichannel strategy reaches your customers across a number of different channels. You may have your own website, links on your brand’s consumer site, social media pages, mobile apps, or marketplace ads. These are all channels where customers can interact with you.

The disadvantage to multichannel

All of these can do a great job of grabbing your customers’ attention, but each channel is treated as its own entity. Each may sit in its own data silo, separated from other your touchpoints with the customer. For example, customers may provide their personal information when they do an online build-and-price, but when they come into your store, they have to provide it all over again to the salesperson, which is frustrating.

Multichannel may also prevent departments from optimally working together. Data silos can inhibit sales, service, or parts from each looking at a customer’s complete history, preventing the symbiotic relationships of all working together for the customer’s benefit.

What is an omnichannel strategy?

Instead of separate data silos, omnichannel seamlessly “weaves” data throughout the customer experience. As customers switch between channels, their information is integrated. Someone can land on your website, make a service appointment, look at a new vehicle, or watch a video on your social media with all of their data following with them to the next channel they choose. Almost all dealerships today are multichannel, but are less likely to be omnichannel.

The advantage to omnichannel

Omnichannel creates a seamless shopping experience for the customer, which in turn makes it easier for them to move forward into new channels without the need to repeat their information to each new segment where they want to connect with you.

It also has numerous benefits for the dealership. Leads from the dealer or manufacturer websites can be seamlessly integrated into the follow-up process, and from there, transferred to the right people. When someone does a build-and-price on your site and then comes into your store, you can immediately look up the vehicle they were considering, and any trade-in or financial information they may have provided. Rather than a cold start, you’re already well into the shopping and purchasing process.

In virtually all dealerships, the sales and service departments operate their own operations independently. That’s to be expected, but in many cases, a single customer is treated as two customers – one at sales and one at service.

Information is centralized with omnichannel, including the customer’s contact and financial information, sales and service preferences, previous purchases, and even how and where they looked for you online. In the bigger picture, this can allow you to concentrate your marketing efforts, maximize the return on your advertising dollars, and better handle your customer appointments.

It also gives you the ability to centralize your inventory information, so your new and used vehicles appear in all of your online channels – and can come off across them all when something’s sold.

Omnichannel can potentially supply information to all departments. Salespeople can know a customer’s coming in for service and can fill the waiting time with what’s new in the showroom; or F&I can check a vehicle’s mileage from service records and proactively offer warranties or other products.

Your brand and marketing are the same across all channels. Consumers like consistency in the messaging they receive, along with quality of service and attention.

What it takes to make omnichannel work

Omnichannel can do some pretty impressive stuff, but it can’t do it alone. Everyone in the dealership has to be board with the information that’s being handed to them, and to seamlessly follow through on every transaction as the next step of the customer’s omnichannel experience.

Customers who reach out, across any channel, must be answered right away. That could involve using some form of AI chatbot, whether it’s to provide an immediate form of contact before a salesperson is able to answer, or outside of business hours when real people aren’t available to reply.

Whenever customers come into the brick-and-mortar store, the first person to greet them should ask if they’ve interacted with you virtually; and if they have, start from there. They’ve already moved along in their purchasing journey, and if you pick it up directly from their last step, you’ve saved time for everyone and created a more seamless experience for them.

The bottom line

Going omnichannel will likely require professional assistance, and there will be some time and money involved, but the results can be worth it. Customers already expect connected cars, and now they expect connected dealerships too. By guiding them through an interconnected car-shopping experience, you’re on the path to an interconnected purchase and beyond.

The third quarter of 2024 is now behind us, and it brought both encouraging and not-so-great news for dealers, as well as for consumers. The Bank of Canada cut its overnight rate by 25 basis points three times, the last in September that brought the rate to 4.25%, which helps to get buyers considering purchases. Some forecasters are expecting additional cuts totaling 50 basis points by the end of the year, and more again in 2025.

However, the pace of job gains slowed over three months through to the end of August, while the unemployment rate rose to 6.6%. On the brighter side, the average hourly wage for permanent employees continues to be ahead of inflation.

It appears most dealers have recovered from the CDK Global cyberattack, and the industry is working to help prevent security issues in future. But on the production side, the U.S. dock workers’ strike will undoubtedly affect parts supply to auto factories.

Looking at Canadian sales

Industry analyst DesRosiers reports that September’s sales were an estimated 157,000 vehicles, down 3.6% from September 2023. As the company said, “A month ago, we warned that it would be difficult for the market to continue its string of year-over-year gains during the final four months of 2024. Well, unfortunately we were proven correct…”

The company offers two reasons to partly explain the decline. First, September 2023 was one of the first months with improved vehicle availability, and so September 2024 was up against a “fairly strong comparable.” Secondly, September 2024 had three fewer selling days than in 2023, due to timing of the Labour Day holiday.

Still, on a year-to-date basis at the end of the 2024 third quarter, “the market is now at 1.41 million units,” DesRosiers reported, “still up a very respectable 8.1% from the first nine months of 2023.” The SAAR (seasonally adjusted annualized rate) for September 2024 was 1.78 million, “broadly in line with what we saw in July and August.”

Some standouts among automaker sales

Among automakers reporting sales, DesRosier noted some standouts in year-to-date sales to the end of September. Volkswagen led in percentage gain among higher-volume brands, up 55.8%. Subaru was up 31.7% and Mazda was up 26.0%, with both exceeding sales of 50,000 vehicles so far. On a volume basis, General Motors was leading the market with 216,000 units, up 9.7% over the same period in 2023.

Metrics at the dealer level

J.D. Power released its Canadian auto market metrics for the end of September 2024, covering a number of important factors for dealers. Over the last 12 months, 50% of new-vehicle buyers financed their purchases, while the other half split evenly between paying cash or leasing. For used vehicles, 53% financed, 45% paid cash, and 2% took a lease.

The average monthly payment on a new loan in September 2024 was approximately $870, down from the year’s peak of $910 in June 2024.

Lease payments over the last year fell as low as $740 in March 2024; went up to $800 in May; and stayed close to that before dropping to about $780 in September 2024.

That same month, 53% of new-vehicle loans were 84 months or longer, and that was the lowest percentage it had been in the past 12 months. It peaked in February and March 2024, with nearly 60% of loans that length, but has been on a slow decline since then.

Days-to-turn on new vehicles was around 55 days in September 2024, and that’s held fairly steady since March 2024. In September 2023, vehicles sat for an average of just 35 days. For used vehicles, the average in September was just over 80 days, up from about 78 days in July 2024, but down from 85 days at the beginning of the year.

New-vehicle prices in September 2024 averaged $48,000, while the average transaction price was about $45,000, and that was pretty much the case for both since June 2024. A year ago, in September 2023, the average vehicle price was just over $50,000, and the average transaction price was $47,000. In September 2024, 20% of vehicles traded in had negative equity. A year prior, only about 17% of trade-ins were underwater.

Plugging into plug-ins

Zero-emission vehicles (ZEV), which includes battery-electric (BEV) and plug-in hybrids (PHEV), rose to 65,700 units in Canada in the second quarter of 2024, according to Scotiabank’s Global Auto Report. While third-quarter results weren’t yet available, the report noted it was a 38% increase over the second quarter of 2023 and the highest quarterly ZEV sales to date.

Quebec was the major driver, with more than half of all ZEV new registrations during the period. However, the report also noted this could be a short-term surge, as the province plans to reduce the amount of its “green” rebates in 2025 and 2026, and eliminate the program entirely in 2027.

Forecasters are also watching the federal government’s plan to implement a 100% tariff on all EVs built in China, which has the potential to affect supply and affordability.

The takeaway

- There was a sales slowdown at the end of the third quarter, but it wasn’t unexpected and, so far, sales overall are on target for approximately 1.78 million vehicles in 2024.

- The Bank of Canada cut its rate to 4.25% and forecasters are anticipating more reduction by the end of the year, which should help to stimulate vehicle purchases.

- Following some upheaval at the beginning of the year, metrics such as days-to-turn, vehicle and transaction prices, and monthly payments generally stayed steady during the third quarter.

- Dealers who work with their customers to find the right financing for their budgets and their borrowing “comfort zones” should have higher success with both new and used vehicles.