Chuck Seguin looks ahead at a year shaped by economic headwinds, shifting OEM demands, and continued dealer resilience
Since we are at the beginning of the New Year, I thought it would be appropriate to offer some insights into the year ahead. I put my Mr. Magoo glasses on, stared into my crystal ball, and really could not see a thing. Just a whole bunch of fog clouding up my view.
Of interest to new-vehicle franchise dealers is the general view from industry pundits that new-vehicle sales levels in 2026 will see slightly less overall volume than 2025. Used-vehicle sales will continue to be significant. Fixed operations will become more important than ever.
This suggests 2026 could be another year where money is made off the life of the vehicle rather than from putting new ones on the road. Consumers will continue to face economic headwinds that affect their purchase and service patterns.
On the brand side, geopolitical pressures will continue to drive investment decisions. All of this adds fog to the crystal ball.
Brands do not appear to be slowing down initiatives involving image and facility upgrades. This is causing many dealers sleepless nights as they try to balance OEM commitments with their own economic realities.
If that is not challenging enough, consumers have their sights set on dealerships’ digital capabilities to meet their ever-changing expectations. Although customer satisfaction at dealerships is very high, this does not stop them from wanting more.
Add this to the fact that brands seem to want a bigger piece of the retail pie at the expense of dealership margins, and one could paint a picture that 2026 may be another demanding year for Canadian dealerships.
But let’s not count out dealers just yet. One thing I have learned over the years is that dealers are resilient and excellent entrepreneurs. Time and time again, they have risen to the challenges facing them and come out on top. Never bet against a car dealer.
Fixed operations generate the highest gross profit percentages in a dealership. Add to that a large potential base of recurring customers who have already been through the service lane at some point.
Much of what dealers can do in 2026 is what I call basic blocking and tackling. Control what you can control and stay within your lane.
Fixed operations generate the highest gross profit percentages in a dealership. Add to that a large potential base of recurring customers who have already been through the service lane at some point.
All that is left is increasing service retention and, voilà, profits fall straight to the bottom line. It sounds simple, but it is anything but.
Service retention campaigns, respect for customers’ time, fast in-and-out processes, minimal appointment waiting times, lifetime customer initiatives, proactive maintenance notifications, and consistent execution and communication are just a few steps that build fixed operations traffic.
Service is also a hot spot for used-vehicle buyback initiatives. Many dealers say they cannot get enough used-car supply, yet strong unapproached candidates drive through their lanes every day.
Just ask for the business. You would be surprised how many customers do not know what their vehicles are worth or what you have available to sell them.
You want to be their first stop when they decide to sell. With today’s data, it has never been easier to value a customer’s vehicle in the drive-thru. You have the vehicle history and market data and can quickly reach a decision and, most importantly, start the discussion.
There are regular, everyday opportunities that deserve attention: cabin filters, tire wear, dents and rust, battery life, wiper blades. Not only do these increase revenue opportunities, they also build customer loyalty by positioning the dealership as a trusted, caring advisor.
Nearly new, certified pre-owned, pre-owned, pre-loved, gently used… call them what you will, they are all used in the minds of consumers. Used vehicles remain a strong source of revenue for both variable and fixed operations. Reconditioning, F&I, accessories, and future recurring business all come into play.
One of the aches in a dealer’s side for 2026 is the on-again, off-again EV initiatives. On the positive side, many consumers are interested but lack knowledge and understanding. This presents an opportunity to build new relationships and lifetime customers.
On the negative side, dealers believe they have already invested heavily, only to watch brands and governments flip-flop on their future approach. There is little doubt there has been a disconnect between government mandates, brand initiatives, dealer investment, and consumer demand.
This will not likely change for a few years, making investment decisions difficult. But make no mistake: dealers will navigate these choppy waters and will find a way to sail profitably into the future.
As I look into the crystal ball, I see both concern and optimism for automobile dealers. Certain brands and markets may struggle in the short term, but there is much to look forward to for dealers who understand and adapt to current realities and choose to take advantage of opportunities in their markets.
The crystal ball may be cloudy, but that does not mean we should stand still.
