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<!-- wp:reyrey-js/list-item {"content":"Vehicle model cycles are getting shorter."} /-->
<!-- wp:reyrey-js/list-item {"content":"How to adapt to a new manufacturing, sales, and financing paradigm."} /-->
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<div class="wp-block-reyrey-js-column"><!-- wp:reyrey-js/paragraph {"content":"It’s a risky business, predicting the future. Want an example from recent history? Go back to November of last year, right before anyone had ever heard of COVID-19, and read some predictions of what 2020 supposedly had in store for the automotive retailing industry."} /-->
<!-- wp:reyrey-js/paragraph {"content":"Now that you’ve got a good laugh out of the way, I should remind you that even though there are obvious perils to trying to predict the future \u003cem\u003etoo\u003c/em\u003e closely, that doesn’t mean we can’t examine current trends and draw conclusions with a reasonable degree of certainty. Indeed, dealers do this every day, with everything from sales numbers to employee expenses."} /-->
<!-- wp:reyrey-js/paragraph {"content":"One especially interesting trend right now (that’s getting comparatively little attention, thanks to COVID-19 dominating the 2020 conversation) points to a potentially unique future on the near horizon."} /-->
<!-- wp:reyrey-js/paragraph {"content":"\u003cspan class=\u0022RR-Font-Weight Bold\u0022\u003eVehicles are Becoming Drivable Smart Devices\u003c/span\u003e"} /-->
<!-- wp:reyrey-js/paragraph {"content":"There’s no doubt that technological advances are having a transformative effect on our vehicles. With in-car Wi-Fi becoming the norm, people have the ability to stay online constantly. Vehicle integration with apps and devices from Google, Apple, and other major technology companies has set new standards for convenience. Using remote access, manufacturers can perform technology updates and send recall information without you ever having to lift a finger."} /-->
<!-- wp:reyrey-js/paragraph {"content":"In other words, our vehicles are becoming drivable versions of the devices we carry in our pockets. And, just as the development times for those devices have continued to shorten over time, so too will the gap between new vehicle models begin to decrease."} /-->
<!-- wp:reyrey-js/paragraph {"content":"\u003cspan class=\u0022RR-Font-Weight Bold\u0022\u003eAccelerating Change\u003c/span\u003e"} /-->
<!-- wp:reyrey-js/paragraph {"content":"There’s a term for this speeding up of technological advancement: “accelerating change.” In essence, accelerating change means the pace of technological progress gets exponentially faster over time because every new round of more powerful technology builds off the previous round’s innovations."} /-->
<!-- wp:reyrey-js/paragraph {"content":"In other words, if it seems like technological advances are coming quicker and quicker every year, it’s because they are!"} /-->
<!-- wp:reyrey-js/paragraph {"content":"So, what does this have to do with shorter vehicle model cycles? Remember, as we digitize our vehicles, keeping those components on the cutting edge will require continual advancement. That’s a side effect of incorporating information technology into a vehicle to such a great degree – something that wasn’t even imaginable just a few decades ago."} /-->
<!-- wp:reyrey-js/paragraph {"content":"\u003cspan class=\u0022RR-Font-Weight Bold\u0022\u003eThe Shortening Innovation Cycle\u003c/span\u003e"} /-->
<!-- wp:reyrey-js/paragraph {"content":"The \u003ca href=\u0022http://www.temjournal.com/content/84/TEMJournalNovember2019_1295_1301.p…\u0022 target=\u0022_blank\u0022 rel=\u0022noopener noreferrer\u0022\u003eshortening innovation cycle\u003c/a\u003e points to some interesting possibilities:"} /-->
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<!-- wp:reyrey-js/list-item {"content":"Customers will begin trading up more frequently as new technology becomes available with increasing regularity. As a result, the used vehicle market will experience a significant and sustained glut."} /-->
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<!-- wp:reyrey-js/list-item {"content":"Manufacturers will face pressure to push out new models quicker if they want to retain their customers, as there will be added temptation to switch brands to a competitor’s more technologically-advanced model."} /-->
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<!-- wp:reyrey-js/list-item {"content":"Overall sales numbers and manufacturing costs will rise."} /-->
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<!-- wp:reyrey-js/list-item {"content":"Shorter-term leases could regain popularity as the perceived “life span” of vehicle models goes down. As a result, dealers, lenders, and buyers may need to create new methods of financing."} /-->
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<!-- wp:reyrey-js/paragraph {"content":"Some of these may sound outlandish, especially in an industry where the safe bet is usually seen as the pessimistic one. It’s worth noting these predictions aren’t set in stone. If 2020 has taught us anything, it should be that none of us really \u003cem\u003eknows\u003c/em\u003e what tomorrow will bring."} /-->
<!-- wp:reyrey-js/paragraph {"content":"But, we \u003cem\u003edo\u003c/em\u003e know the accelerating change for technological advancement – especially information technology – has accurately predicted our progress for over 50 years now, and there’s no evidence that trend will stop anytime soon."} /-->
<!-- wp:reyrey-js/paragraph {"content":"It remains to be seen whether the industry will respond in exactly the way I’ve laid out. But, there’s little doubt that exponential progress will continue, and it will come faster and faster."} /-->
<!-- wp:reyrey-js/paragraph {"content":"What will dealers do with these challenges and opportunities? How will they market new technology, choose who to target, approach vehicle financing, and deal with a bloated used vehicle market? These questions may determine who will retain a competitive advantage in the coming years."} /--></div>
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