With over 1,600 retail automotive and powersports dealers in its network, EFG Companies reports growing concern among dealer principals about the impacts of current market and economic conditions. Company leaders say success in the second half of 2025 will require strategy, preparation, and adaptability to address challenges affecting sales and revenue.
Five Key Questions Facing Dealers
What business changes should we make now, given the uncertain economy?
Dealers cannot control factors such as interest rates, tariffs, and inventory constraints, but EFG advises closely evaluating annual reinsurance and revenue goals. Dealership owners are encouraged to analyze profit metrics and personal wealth creation strategies to maintain strong positions.
How can we mitigate losses from tariffs?
Training and recruiting remain critical. With front-end margins and unit sales under pressure, dealers are being urged to focus on back-end gross. Sustained training, supported by management and reinforced through structured pay plans, is seen as essential for maintaining performance and avoiding old habits from the pandemic period.
How can we drive more traffic to our dealership?
Consumer concerns about inflation and employment are expected to continue affecting sales. Dealers are encouraged to focus on fundamentals to increase online-to-showroom conversions. Products that give buyers confidence, while also supporting fixed-operations revenue and loyalty, can help build consumer trust during uncertain times.
What changes should we make to our processes?
With consumer buying habits increasingly shifting online, artificial intelligence tools are gaining traction. EFG emphasizes the importance of value-driven differentiation and consistently delivering a “why buy here” message at each customer interaction. Training across departments to reinforce personalized service is recommended.
How can we increase our margins and make more per sale?
As front-end margins decline, back-end margins become more important. EFG notes that culture, behavior, and performance all play a role in improving results. Needs-based selling, supported by comprehensive training, can significantly increase F&I profit.
Industry Context
“If we take the lessons learned from COVID and the Great Recession, we know the root cause issues impacting dealer profit,” said EFG CEO Jennifer Rappaport. “Some of today’s challenges may be unique, but the underlying strategy is the same.”
