Quality content and workshops, extensive vendor display, and amazing networking opportunities are just some of the highlights.
Fallsview Casino Resort in Niagara Falls was the setting for the 2023 Automotive Conference & Expo, hosted by the Motor Vehicle Retailers of Ontario (MVRO) in conjunction with Consolidated Dealers. The two-day event, which took place on October 17 and 18, featured a host of general sessions and workshops, as well as an extensive on-site trade show, plus a kick-off party at nearby Margaritaville and ample networking opportunities.
On the content side, the formal part of the event began on October 17, with an introduction from radio and TV personality John Scholes, who served as emcee for the duration of the conference. The first session came from Innovation Strategist and Futurist Lee Jeyes, who discussed strategies and innovations which have and continue to change the face of business.
As the head of innovation at Walmart Canada, Jeyes led a team of researchers, strategies, developers and creators that consistently sought to push boundaries and challenge the status quo. His contributions to the launch of Walmart Canada’s online business resulted in more than $500 million in business value over just a two-year period.
The right mindset is critical
Jeyes said that to prepare ourselves for the future we really need to zoom out and take a look at the past. He also noted that in order to move forward, having the right mindset is essential. Resisting change won’t get us anywhere but accepting it and then becoming “an architect of change,” will. Jeyes explained that both the automotive industry and the retail sector have been subjected to some of the biggest disruptions in business over the last 15 years and the rate of change is only expected to accelerate. Therefore, in order to navigate successfully through this almost constant disruption, businesses, including dealers need to rethink their entire strategy as well as the tactics they employ to engage and cultivate their customers.
This clashes with traditional business models that focus on predictability and stability. “Every single part of retail is being disrupted over and over again,” said Jeyes, noting that in many cases businesses don’t have an innovation problem, but a culture problem. “In order to understand innovation,” he explained, “you truly need to understand people. The technology is just a tool, and there’ll be more technology than you can ever choose from.”
Jeyes explained that the businesses of the future that succeed will be those that truly understand people and create a culture that thrives on experimentation and innovation—one that’s willing to try different things over and over. He said it was important to have an environment where “dreamers” are actively encouraged to develop new ideas and concepts—with a time horizon that is greater than one year. “Be specific on what you are trying to achieve but allow the team’s creative freedom to be successful in figuring out how to get to that objective,” said Jeyes. He noted that while Ideas are easy, implementing them is hard, and “consistent experimentation is [perhaps] the hardest thing [of all].”
Jeyes discussed how YouTube and social media influencers are revolutionizing society and the way consumers interact with businesses. He pointed to the launch of influencer-branded candy bars and soft drinks that have completely upended the traditional, established model, dominated by legacy firms like Coca-Cola, Hershey and Pepsi that have vast resources.
He said dealers need to seize on the opportunity to connect with macro and midsize influencers/creators in their communities, since once influencers become big, with legions of followers they essentially turn into celebrities—losing that direct connection with their audience. “There are probably 5-10 macro or midsize back or midsize creators that just talk about anything to with cars,” said Jeyes, noting that these influencers can be the perfect ambassadors for dealers in promoting the brands, vehicles and services they provide, adding a great deal of credibility and genuine connections between them and the people who live and work in their communities.
Additionally, by leveraging the growing number of Artificial Intelligence tools and solutions available, dealers stand on the cusp of a huge opportunity to cultivate strong, long-term relationships with consumers, though the sooner they start, the sooner they can realize the benefits of doing so.
Hot Stove and hockey
A major highlight of the event was the ACE Hot Stove session featuring famed Sports Journalist and presenter Rod Black, along with hockey legend, Olympic Gold Medalist and now Emergency Room Doctor Hayley Wickenheiser. By all accounts a captivating session, a key takeaway was the importance of teamwork in achieving your goals and how the smallest detail can sometimes make the biggest difference. Wickenheiser said her time as a hockey player and Olympian has been a huge help in pursuing a second career as a doctor and when things appear out of control, the one thing we can control is our performance and behaviour.
“You need to stay even keel no matter what is going on around you,” stated Wickenheiser. “You have to control your emotion and show your leadership,” she said, while also acknowledging that before you can take care of others, you need to take care of yourself.”
Wickenheiser, along with other sports celebrities, including NHL legend Darryl Sittler, curling champion Jennifer Jones and famed NASCAR/sports car racer Ron Fellows took the time to sign autographs at the ACE Conference and Expo following the day’s sessions.
A major highlight of this year’s ACE Conference was the Disruption and Evolution Used Market Panel discussion. Moderated by David Robbins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book and featuring Mathew Growden, Head of Google Canada’s Auto Retail Team; Vince Palladino, President & CEO, Palladino Auto Group; Matt Trapp, Regional Vice President, East Region and Canada for Manheim and Shawn Vording, Vice President, Product & Sales, CARFAX, the panel looked at current trends impacting the used vehicle market in Canada as well as potential disruptions on the horizon, including electric vehicles and current federal government mandates regarding EV adoption.
Inventory remains a concern
Lack of inventory has been a major issue for dealers over the last few years, both on the new and used vehicle side. Things have been improving steadily last year for new vehicle availability and on the used car side, inventories have also been increasing. Yet they are still nowhere near pre-pandemic levels.
According to Shawn Vording, CARFAX data points to inventory being up around 29% compared with 2022, though with that being said, significant volumes of used vehicles are being exported to the U.S., while more and more consumers are choosing to sell privately instead of trading in used cars to dealers. A big issue continues to be the lack of lease returns, driven by supply constraints, as a result of the COVID-19 pandemic. This means that while inventory volumes are growing, they aren’t growing fast enough to meet demand, creating this vicious cycle where demand stays high, along with prices.
Vincent Palladino noted that at the retail level, it is tough to source used inventory right now and in order to keep up with demand, dealers are having to be ultra-efficient in both sourcing and turning used vehicles. Additionally, as inventory levels start to creep up, gross margins are coming down, meaning there’s more pressure to generate revenue through F&I on the used side.
According to Matt Trapp, as far as auctions go, inventory availability continues to increase. In Canada, it’s up 38% in 2023 while in the U.S., growing numbers of repossessions are driving up the availability of used vehicles. That said, lack of off-lease inventory still remains a significant challenge, though some vehicle brands and models are faring better than others in this regard, which is reflected in current pricing trends.
Because inventory levels are still depressed, dealers are tending to retail more used vehicles and wholesale fewer of them, which combined with still robust demand for exports, is putting pressure on the used vehicle market overall. This means that it continues to be challenging for many dealers to operate a full used vehicle operation which can have a knock-on effect on their business, since if they can’t get that used car customer, they can’t get service work from them and they can’t transition them into being a new car customer down the road.
Another factor that could influence future used inventory is ongoing supply disruptions on the new vehicle side as well as the UAW strikes south of the border that have caused Ford, General Motors and Stellantis to halt production at several assembly plants as well as supplier facilities. This means that new vehicle and parts availability will continue to be a problem going forward, meaning that any easing in price pressures and growth incentives we’ve seen, could be clawed back, making it even more challenging for dealers.
On the hot topic of EV adoption, the panellists concurred that the existing aggressive mandates put in place by the Government of Canada aren’t likely to be achieved and there was differing consensus on whether battery-electric was the future or whether alternative propulsion could disrupt the current trajectory. Mathew Growden argued that the future is still very much electric, though when mass adoption could happen, remains very much a moving target.
Other key highlights of the event included an economic update from Rebekah Young, Vice President and Head of Inclusion and Resilience Economics at Scotiabank. Young analyzed the “higher for longer” interest rate environment and the impact that is likely to have on consumers and dealers, as well as ongoing supply chain disruptions and below-normal inventory levels that are likely to keep prices elevated, certainly for the foreseeable future. Nonetheless, the importance of personal transportation to the Canadian economy, population growth and an aging vehicle fleet does have the potential to provide optimal market conditions for dealers over the longer term.
Rounding out this year’s ACE Conference was a Demo Theatre sponsored by Kijij Autos, where vendors had the opportunity to share their elevator pitches in just two minutes, plus a special Women Driven Awards ceremony. There was also an insightful and quick-hitting interactive general session from Steve Hall, Vice President, NCM Associates on Best Practices from 20 Groups, while at the trade show, a special passport program enabled attendees to receive some great prizes by visiting the various vendor’s displays.
Talking with dealers and other key stakeholders that attended ACE this year, the response was very positive, with the workshops and content sessions highly praised by many, as well as the considerable advantage the on-site trade show offered in talking directly with vendors. All that’s left to say, is we can’t wait to be back at this event in 2024.