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Sales accelerating at N.J. auto dealers as recession fades into rearview

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George E. Berry Jr. is a CPA and a partner in the Mironov Group accounting firm, in Edison.
George E. Berry Jr. is a CPA and a partner in the Mironov Group accounting firm, in Edison. - (The Mironov Group)

New Jersey auto dealerships that weathered the past recession are seeing improved results that reflect the continued recovery of U.S. auto sales, said George E. Berry Jr., a partner in the Mironov Group, an Edison-based CPA firm specializing in accounting and consulting services for auto dealers.

Berry said the future will see dealers increasing their use of technology to sell more vehicles, while keeping a lid on overhead expenses. He estimates that by 2025, auto salespeople could double their current average of 12 to 18 vehicle sales per month. Mironov has about 375 auto dealership clients — 300 in New Jersey and others in Pennsylvania and New York.

"In the future, there will be less hand-holding at the dealership," Berry said. Consumers will do their vehicle homework online and "will be much closer to a decision" when they visit a dealership. So rather than test driving five cars, they will test one or two, and Berry said a sales process that now can take three to five hours will be cut to about two hours through better use of technology by dealers and their customers.

Berry said the dealership's work force is a big chunk of its operating expenses, "and if you could reduce the number of salespeople and have each salesperson sell more vehicles, it would reduce the personnel expense." He said dealerships also will use more technology to enable shoppers to make insurance, financial and warranty decisions online, "so all that information is available to the dealer when the customer walks through the door."

U.S. auto sales rose 13 percent, to 14.4 million vehicles, in 2012, according to the National Automobile Dealers Association, which is forecasting 15.4 million for 2013 — close to the 16 million to 17 million a year level before the 2008 financial crisis.

"There is a lot of pent-up demand" for new cars, Berry said. "The average age of a car on the road is approaching 11 years, and people who put off buying cars during the recession have to decide whether to keep fixing their vehicles or replace them."

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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