If there ever were “the good old days” when it was an easy business to sell, finance and service automobiles, those days are well in the rear-view mirror. Delegates heading home from the largest-ever Western Canadian Dealer Summit, which kicked off at Banff Springs Hotel in Alberta, would have left scratching their heads at the pace of change and the fact that it’s coming from all directions.
Canadian auto dealer’s team was on site for all the conference sessions and all the networking and social events, where you really get to learn about what’s on the minds of dealers. The annual event is organized by the Motor Dealers Association of Alberta (MDA), the Saskatchewan Auto Dealer’s Association (SADA), and the New Car Dealers Association of BC (NCDA).
Minister Dale Nally, Service Alberta & Red Tape Reduction
The first speaker was a provincial cabinet minister who talked to dealers about all the efforts the government was making to reduce red tape and regulations hampering business. Minister Dale Nally, Service Alberta & Red Tape Reduction, also delivered a strong pitch for the virtues of moving to and doing business in Alberta.
“We have the lowest corporate taxes in Canada,” said Nally. “We also launched a war on red tape and turned ourselves into a business-friendly environment.”
Nally says a lot of people are moving to Alberta because of high wages, low taxes, and affordable housing. This is resulting in a good economy that is leading to an increase in vehicle sales for the province’s car dealers.
Nally said there are groups and politicians in other parts of Canada that have waged a “war on cars,” including Steven Guilbault, the federal Minister of Environment and Climate Change, who recently said we need to stop building roads. “As far as our government is concerned there is no war on cars,” said Nally, saying they appreciate the people who make, sell, and service vehicles in the country.
Erik Johnson, Vice-President and Senior Economist at BMO Economics
Erik Johnson, Vice-President and Senior Economist at BMO Economics, presented a market outlook, starting with an update on the outcome of the United States Presidential election. The upside for the Canadian economy is that generally the stronger the U.S. economy is, the better it is for Canada, since we are a large export country, said Johnson.
Johnson said there are some concerns that Canada could be negatively impacted by higher U.S. tariffs from the new U.S. administration. “The big inflation shock we all went through is mostly over,” said Johnson.
Consumers are still faced with sticker shock on higher car payments when they arrive at dealerships. And their overall purchasing power is under attack on all sides from higher costs of other goods, like groceries and other consumer goods.
Johnson said BMO projects 1.89 million new vehicle sales in 2024 and 2 million in 2025.
Todd Bourgon, CEO and Executive Director of the Motor Vehicle Retailers Ontario (MVRO)
Todd Bourgon, CEO and Executive Director of the Motor Vehicle Retailers Ontario (MVRO) talked to dealers about the work his association is doing to recruit foreign-technicians to help the province’s dealerships fill their labour shortages.
Bourgon said he has been hearing from dealers for years: “We need help. We need technicians.”
“The first thing I would always want to do is get home-grown talent into our dealerships,” said Bourgon, but he said there just aren’t enough people entering Canada’s colleges to fill the gaps. “Not enough young people are looking at our industry as a viable industry for trade,” said Bourgon.
He said issues like poaching, increased competition from other industries, and increased wages to compete are aggravating the situation.
Bourgon said MVRO set out to capture data on the labour shortages in the industry and they did a labour market study. As of Q1 2023, there were more than 3,000 vacancies in OEM dealership stores for automotive trades in Ontario. Prior to the pandemic, there were approximately 1,500 vacancies. The report calculated the revenue loss to the dealership of one technician vacancy to be more than $429,000 per year.
The workforce is aging and the gap is worsening. To increase the number of vacancies, the association started looking at recruiting foreign workers. Bourgon said the competition for skilled talent isn’t only between dealerships, it’s also all the aftermarket providers — and it’s a global problem, not just a local one.
Bourgon relayed his experience in recruiting skilled trades talent from the Philippines to help fill the gaps dealerships need. Bourgon and an expert team regularly visit the Philippines and vet and test the skills of foreign techs on site. He said there are 120 million people in the Philippines. The technician candidates there speak English, are well-trained, and have experience needed to hit the ground running when they arrive to work in Canadian dealerships.
Bourgon said, surprisingly, housing has not been an issue for the techs when they arrive in Canada. And dealerships have been able to help them get settled and find adequate housing. Many large dealer groups and smaller rooftops are using the program, and one dealership group has hired 53 techs from the program. Bourgon urged dealers to reach out to their provincial dealer associations if they are interested in taking part in the program.
Mike Mazgay, VP Automotive Partnerships with SiriusXM, presented data on car buying trends. As an example, he said 60 per cent are willing to wait 12 months for a vehicle, 60 per cent visit OEM or dealer websites, and 84 per cent use dealerships as part of their car buying journey.
Mazgay said people are listening to soundtracks when they are researching vehicles. He said “56 per cent of GenZs and Millennials say: ‘audio is an escape from too much visual stimulation.’” Younger people feel inundated by the screens, and they are overstimulated and need to decompress.
Mazgay said listeners are trading time spent with other media for podcasts, which is moving their attention from video on demand, am/fm, social media and TV. “There is a lot of cord cutting and they are listening to podcasts,” he said, adding they are listening to them in the vehicles you are selling them. Mazgay said 75 per cent of customers desire more interactions with real people as technology advances, citing research from PWC.
He said another trend is the rise in personalization. He cited McKinsey research that found 76 per cent of consumers are more likely to buy from brands that personalize an experience. “Personalization doesn’t have to cost anything. Understand your customer,” said Mazgay.
He advised dealers to gather information about them and do small things to personalize the experience, like adding the presets to their favourite SiriusXM channels before they leave the dealership.
Mazgay introduced Ryan Ladisa, newly-hired Senior Director of Media Sales at SiriusXM Media Canada, who spent 30 years in selling advertising in a variety of media. Ladisa took dealers through various trends in audio listening habits and how they are impacting the marketplace.
Ladisa said podcasts have transcended from niche to mainstream, seeing a 68 per cent growth since 2018, and that SiriusXM has some of the top podcast content in Canada. Ladisa said podcasts are the perfect companion, as people listen while they are working, driving, cooking, or exercising.
Paul Williams, CADA Chair
After the lunch break, representatives from the Canadian Automobile Dealers Association (CADA) took the stage to provide a number of key updates. Paul Williams, newly-elected CADA Chair, provided remarks about his role on the CADA board, and provided an overview of the types of issues that CADA is confronting with governments and OEMs.
Michael Psotka, CADA CFO and Director of Member Services
Michael Psotka, CADA’s CFO and Director of Member Services, provided a brief overview of the CADA 360 Services provided to dealers, and urged dealers to visit the CADA booth to learn more about the new RecovR lot management and vehicle recovery technology. “It’s the best program in the industry,” said Psotka.
Representatives from CADA’s Ottawa office, Huw Williams, Director of Public Affairs and Charles Bernard, Lead Economist, updated dealers on a wide range of political and economic issues.
Charles Bernard, CADA Lead Economist and Huw Williams, CADA Director of Public Affairs
Williams said polls show that Conservatives have about a 20 point gap over the Liberals, which will effectively wipe out the Liberal Party in the next election. Bernard said the Bloc Quebecois are likely to play a significant role in the next Parliament.
Williams said the Conservative party and their MPs and staffers are actively working in Ottawa getting ready to take power and implement their agenda, and have had historic fundraising levels. He said governments and other interest groups are waging a full on war on cars in Québec, where the government is mandating that no ICE vehicles, new or used, can be sold after 2035 in the province.
He said the association was also working hard on the auto vehicle theft crisis, working with police officials and governments.
Olivia Stapleton, Marketing Specialist & Sales Enablement at Dealer Teamwork and Founder at Next Gear Automotive
Olivia Stapleton, Marketing Specialist & Sales Enablement at Dealer Teamwork and Founder at Next Gear Automotive, presented on the Gen Z Dealer Playbook, offering strategies to connect with next generation shoppers. She said if dealers want to connect with Gen Z customers, they need to rethink the way they cater to this generation of people who were born between 1995-2012.
Today’s younger buyers aren’t just looking for a car, they are looking for an experience, said Stapleton. They want a seamless experience between all platforms. If an experience feels disconnected, 60 per cent plus of Gen Z buyers will just walk away.
She said the next gen consumes information differently, but also seeks information differently, especially from emerging tools like AI search tools Gemini, Perplexity and Chat GPT.
She urged dealers to visit outlier platforms, and then seek the way people are talking about your brand and your dealership. She pulled up some examples by just searching for “bad car dealerships Canada” and pulled up lots of examples of terrible reviews and commentary that are posted online.
For Gen Z, brand loyalty is rooted in their experience, not just a familiar name. They are also quick to switch brands, and aren’t shy about sharing their experiences online.
Stapleton said businesses need to listen to Gen Z consumers and learn and act on what they hear. “When you lead with listening you will position yourself as the kind of partner we can rely on,” she said. She added that this generation is already in the driver’s seat and businesses need to start to reach out to them to find a better way to interact with them.
Fifty-four per cent of Gen Z prefer leasing over buying, she said. When it comes to their perspective on products, it has to align with their needs. “We will drive that new car into the ground because we simply can’t afford a new one,” she said.
Nimalan Bala, Industry Manager, Automotive & Travel, at Pinterest Canada
Nimalan Bala, Industry Manager, Automotive & Travel, at Pinterest Canada, showed a video about Pinterest. “Pinterest means ideas, inspiration,” said Bala, saying the platform is really about an individual’s interests, and is different from many other online platforms. “We are personal media, not social media,” said Bala. “Pinterest is the last positive corner of the Internet.”
Pinterest sits at the intersection of search, social media and commerce. Pinterest users or “pinners” are in a future-based mindset. They aren’t posting about their past activities or holidays.
The next session was on the future of marketing and was moderated by Mathew Growden of the Change Optimist Podcast. His panelists were Rhys Albrecht, Bannister Auto Group, Brian Sencich, Tik Tok, and Christos Nikitopoulos, the Trade Desk. “Where are the fish?” said Growden, when asking where the car buyers can be found.
Nikitopoulos from the Trade Desk answered by describing where the fish “used to be.” He said TV audiences were starting to dwindle a bit before COVID, and then when the streaming services really took hold, cable television revenues plummeted. “We had a decade’s worth of change in about five years,” he said.
He said subscriptions on TSN and Sportsnet are almost half of what they used to be. “Traditional media has changed,” he said. “They are watching content — just not in traditional ways.”
Brian Sencich, from Tik Tok said people are watching a staggering amount of content on their phones.
What is the video strategy for a car dealer these days? Growden asked Rhys Albrecht, from Bannister Auto Group, who works at a group with 25 stores. He said some stores use video really well, others not so well. “Video is a long-term strategy,” said Albretcht, saying it can take 18 months to see a return on a dealership video strategy.
Growden said no one wants to be on their parent’s social media platform, he said. The young people he teaches at the Automotive Business School of Canada for example, use Snapchat.
“Is anyone in the room tired of being sold AI?” asked Albrecht, adding that he was a skeptic of some of the AI tools being sold to dealerships.
Sencich said having an agency for dealerships who really understand digital marketing and media buying is essential. He said the self-serve platforms and Ad Management tools built into the platforms are really designed for small businesses who can’t afford an agency.
Alysha Newman, 2024 Summer Olympics bronze medallist
A surprise guest took the stage, when Bri Newman interviewed her sister Alysha Newman, who won a bronze medal in pole vaulting at the 2024 Paris Olympics.
Newman recounted how her path to Paris, starting in grade school when she started to gravitate towards track and field events. When she broke a pole vault record, she suddenly started to get more serious about the sport, turning professional in 2016 and qualifying for Paris in 2024.
Newman revealed that along her journey, she had a serious concussion and struggled, and couldn’t even remember the names of animals or the sounds they made. Then after a disappointing performance at the Tokyo Olympics, she got some help, and started the journey to heal and rebuild.
She worked with a neurologist to help her reprogram her neurons to be who she wanted to be. Her neurologist helped her rewire the way she saw challenges in her life, or day to day life. “You don’t have to be an Olympian to change your mindset,” she said.
“When we are trying to accomplish something that has never been done before it can seem extraordinary,” said Newman. She created something to say, it’s just the next bar. You simplify it and make it attainable. “When I am done competing I can’t wait to bring my brain health strategies to the world.”
Newman recounted her rule of 12s. “She said she can’t get angry about things until at least 12 things go wrong,” she said. She said when she was competing for the medal in Paris, she reached 8 things that did go wrong.
Brian Kramer, EVP Cars Commerce, General Manager, Accu-Trade, kicked off on day two and presented on used car trends. Kramer said EV sales are higher than the search activity would suggest. Why is this? He said people are coming in for a new vehicle purchase, and find the prices are high, yet used EVs, particularly used Teslas make an attractive option.
Kramer said one big trend in the United States is that the large U.S. vehicle aggregators are acquiring more vehicles from consumers than ever before. For every 100 cars a dealer sells, there are only 43 trade-ins. Carvana, Carmax, Car Nation, Lithia are buying cars directly from consumers. They have a very frictionless, effortless process. “They are doing it in a very profitable manner,” he said.
Kramer said the profit on the front of a used car is about $3,400. They are running $2,000 a car in F&I, and $1,000 in wholesale. He said every dealer in the room can be their “own Carvana” and avoid having someone else acquire all the used car inventory. These large aggregators are acquiring 92 per cent of their inventory from consumers. That number used to be in the teens when they were relying on auctions.
They have lowered their advertising costs down from 14 per cent to just over 1 per cent. “Carvana is kind of like the Tesla of the used car market,” he said, adding they are using AI tools for 83 per cent of their vehicle valuations. They are acquiring cars from consumers in the sweet spot of vehicle pricing. “We underestimated them and didn’t take them seriously when they entered the market.”
Kramer presented their AccuTrade product that helped dealers perform more efficient and accurate vehicle appraisals. He said in many cases dealers will underpay for some models and overpay for others, because they lack data to make an accurate estimate of their retail sales value.
Steve Greenfield, CEO of Automotive Ventures, gave a detailed overview of the market trends in automotive. “We are coming down to a more normalized environment post-COVID,” said Greenfield. “We will all look back and tell our grandchildren about how good the times were.“We are getting back to normal.”
He said history will likely mean dealers will return to the same profitability of 2 per cent net profit after tax — a number that has held consistently for 45 years. Interestingly, he said the average salesperson in America sells 10 cars a month — that’s the same rate as in the 1950s.
Greenfield says he didn’t expect the direct sales model from OEMs to consumers will really materialize. “The franchise dealer model has been eerily defensible since its existence,” said Greenfield, adding the key to the business model is: “who owns the inventory risk?”
In regular markets, with too much supply and with cars being discounted, OEMs don’t want the aging inventory on their books. Greenfield says globally we are seeing an increase in electric vehicle sales, but he said the rate of increase is slowing down considerably. He said tariffs are buying North America a bit of time before the Chinese OEMs arrive, but the industry will need to develop a strategy.
The best performing dealers focus on the lifetime value of their customers.
He said this is the secret weapon of the dealership world. It’s hard, not often practiced, but it works.
Hailey Taskey, Senior Advisor, Partner at Lloyd Sadd, presented on Cyber Risk, and presented some startling statistics showing the extent and costs associated with cyberattacks. For example, the average cost of a cybersecurity breach to businesses in Canada is $6.94 million. Forty-two per cent of businesses that pay ransom manage to have their data restored. And $350,000 is the average cost of a cyber liability insurance claim for a middle-market business (more than $100 million in revenues).
“This stuff is not going away and it’s expensive,” said Taskey, who outlined a five step plan for dealers to build a cyber security approach.
The CDK outage in 2024 led to a 7 per cent drop in vehicle sales during the outage period, she noted.
Daniel Ross, Senior Manager of Industry Insights and Residual Values at Canadian Black Book, presented a market update. He said major economic variables have been improving affordability concerns, and that prices were normalizing as used supply has increased. Ross said U.S. buyers are active in the Canadian market and are buying a lot of the used car inventory.
Niel Hiscox, President of Universus Media and Publisher of Canadian auto dealer, moderated a panel of western dealers discussing OEM and dealer relationships.
Ashley Wolfe, Dealer, Wolfe Automotive Group, runs six GM dealerships in Alberta and B.C. In her opening remarks, Wolfe said for the most part, dealers are aligned with the direction of GM. “Their top priority is to maintain that dealer relationships,” said Wolfe. “The direction on EVs has been clear. Whether you are for or against it at least you know where you are going.”
Jillisa Merrifield, Watrous Mainline Motor Products, a GM dealership in Saskatchewan, became a GM at 27 years old. “They have been open and transparent with us,” said Merrifield. “They are working with us every step of the way, it’s been easy for us so far.”
Andrea Backman, Dealer, Key West Ford / Downtown Kia EV Ctr in British Columbia said: “It’s always been our secret weapon, the relationship we have with the leaders in Canada,” said Backman. She said she came to the industry in the 1990s when there was a lot of hostility. Now, anything dealers bring forward, they will get heard from the Canadian OEM leaders.
Backman said the inventory situation is a bit reactionary at the moment. “What phase in the past five years feels like it has been planned out?” she asked. The turbulence of the past five years has required more fast action and improved communication. “The willingness to change things on a dime has been more readily apparent in the past few years,” said Backman.
With inventory building, the reaction used to be to just throw incentives at it, but that’s not the case now, said Backman.
Wolfe said it’s important to keep the lines of communication open, because things are changing so quickly. “It’s very hyper-focused right now.” She said she is on the GM Dealer Council and the dealers who are on the council are hard working and take their roles seriously.
“At the Dealer Council level we are continuously very hard on ourselves because we don’t think the communication is where it needs to be,” said Wolfe. She added that more dealers are involved in various boards, regional marketing boards, and fixed ops councils. Wolfe advised dealers to get involved in those activities.
Backman said when OEM field reps visit, they need to visit with more levels of management at the dealerships during their meetings. “We need more representation, because a sales manager will see things differently than a general manager, and a GM will see things differently than a dealer principal.”
Merrifield said she has found that she gets issues dealt with directly from their field reps in Saskatchewan, and has never had to surface an issue to a dealer council. She said they are getting the “duds” that nobody wants in terms of inventory from the OEM, and the communication could be better on that front.
Wolfe said the biggest issue right now is profitability. The transition to the EV market is a big concern with dealers. GM is all-in on EVs, and are working hard to produce EVs at scale and to produce efficiency at a lesser cost to get dealers back their profit. She said the biggest concern right now is that all dealership operations are getting more expensive. “You need that $7-8,000 margin at the front, we aren’t seeing that with EVs.”
Backman said the marketplace in B.C. is different because the consumers are demanding EVs. But it is coming down to the margins. The OEM is losing money on every EV they sell, which makes it a difficult pricing situation. “It’s a dance,” said Backman, saying they have to make an enormous investment. You need the tools and a differently-trained tech, and the people that are more adept at that going to computer industry jobs.
“You need to be able to charge EVs, you need them operational within your fleets in your stores. There are so many other costs related to selling EVs,” said Backman. At the store there are a lot of “hidden costs” they are expected to absorb. “That’s been one of the biggest battles in my 25 years in the business,” said Backman.
Backman said she would likely have to make a different business case for EVs if her business wasn’t based in British Columbia. “If you make a business decision of what you need to do to serve your customers, you can live with it,” said Backman. “It’s harder to make the business case when someone is telling you to make an investment for a customer you aren’t seeing yet.”
Wolfe said dealers are always innovating anyway, because they are running so many different businesses within their businesses they are always looking for efficiencies and providing better customer service. In terms of tech stacks dealers use for their businesses, it’s difficult when the OEMs mandate one provider, and the OEMs are doing a better job of giving them vetted choices.
Harvey, Chief Alliances Officer, Keyloop
Harvey, Chief Alliances Officer with Keyloop delivered a luncheon keynote, “optimizing your margins.” Harvey said the optimization of margins can be aided by software tools that help dealers connect with their customers.
Harvey said only 1 per cent of consumers say they describe the car buying process as “ideal,” citing research from McKinsey. She said it’s getting difficult to make money selling cars, so there is a prize for dealers that can optimize their software to improve their customer experience.
Harvey said one dealer she talked with has 200 pieces of software from 70 companies and it takes more than a dozen pieces of software to close a deal. “Are we overcomplicating our landscape?” she asked.
She said 94 per cent of retailers recognize they are highly inefficient. Keeping a customer is 8 times cheaper than getting a new customer, she said. She also said her company did an analysis and found there are 30-40 per cent tasks they do everyday that don’t impact customers or deliver value. “AI is a buzzy word and we are almost at the top of the hype cycle,” said Harvey. So where is the low-hanging fruit that you can use for your business?
She said her firm used AI to cleanse data, analyze leads, and other AI related tasks. She also highlighted that emerging new tools like Chat GPT and Perplexity and platforms like Reddit are now active during the consideration part of the consumer journey.
“The DMS used to be the only game in town. The DMS essentially ran your business. Then the DMS companies didn’t really do anything,” said Harvey. So they just added on features and features, which just adds a bunch of systems that don’t talk to one another.”
There are efficiencies in place to put a platform in place to knit all those systems together, she said. The DMS providers didn’t innovate the way that it should. “I think the tech community has failed you.”
Fenton Bolden, a dealer principal, delivered the event’s only session focused on fixed operations. Bolden said 50 per cent of the profit from a dealership should come from fixed operations, but it’s usually about 30 per cent in the dealerships he visits. “Your fixed operations and parts departments are your single biggest source for improved profitability.”
Bolden said he often gets dealers talking about how “well they are doing” in fixed operations. He reviewed a lot of the “lie” KPIs dealers tell him about. “If you criticize someone based on a number they will find a way to make that number look good,” he said.
Bolden said dealerships need some sort of a benchmark for where they should be and they should be asking themselves: What is the current labour capacity of my dealership?How many of these hours are being paid for? How well do we convert revenue into gross profit and then gross into departmental gross profit?
Bolden said the similarities between stores are remarkably similar. “It’s not hard for me to go into a dealership and improve the net profit because no one has focused on it for the past 15 years,” he said.
Bolden said if you want to improve profitability, make sure you hire great service advisors. You can have great technicians, but a great service advisor can sell his or her time. He said the average technician costs a dealership about $6 a minute. “Opportunity cost is everything in fixed operations,” he said.
“Embrace chaos, it’s the world we live in. Get used to it,” said Bolden. Hire people who thrive on chaos and try to get them to help consumers. “You can’t control chaos so stop trying,” said Bolden. When you try to limit your chaos, you limit your capacity, and your profit for your store.”
Kole Hicks, Co-Founder, CRO of AutoCorp.AI
Kole Hicks, Co-Founder, CRO of AutoCorp.AI, delivered a session looking at the impact of auto theft and fraud in the industry. “Fraud and theft is growing at a scale that is surprising. It’s alarming.”
Identity theft, vehicle theft and fraud are growing rapidly across the Canadian auto industry, he said. He said in Ontario alone, there are 1,850 criminal organizations operating, and everyone is impacted by theft or fraud in one form or another. Hicks said a growing problem is cloned or re-VINNed vehicles, and he said the RCMP estimates there are 25,000 of these vehicles on the road today.
RCMP say there are 25,000 vehicles on the road today with cloned or re-VINNed vehicles, said Hicks. He said one reason for the growth is that auto theft is profitable: a spotter looking for the police makes $500, the car thief makes $1,500, and the brokers can make up to $50,000 per shipping container that is successfully shipped overseas.
“People aren’t afraid of stealing cars. It’s not a violent crime, no one is shooting at you,” said Hicks, saying it’s a high profit low risk crime.
Hicks said his company had introduced an ID verification tool to help dealership personnel reduce fraud and help verify customers applying for credit or purchasing vehicles.
