William E. Metzger opens the first car dealership in the US on June 7, 1897 selling Waverley electric cars. Two years later, he sells the first automobile built by Oldsmobile. (In 1902, he helps form the Cadillac Motor Car Company.)
The first car advert, for Winton Motor Carriage Company was featured in Scientific American magazine.
The Ford Motor Company is incorporated, selling its first Model A on July 23, 1903.
Henry Ford makes his Model T. affordable with innovations like interchangeable parts and the assembly line. By 1914 this has reduced the cost from $825 to $490; by 1921 the Model T costs only $310.
Doctors are among the first to use automobiles, making house calls much easier. Police officers can also now respond to calls more quickly than on horseback or on foot.
The first two car magazines ever (The Horseless Age in the U.S. and The Autocar in the U.K.) debuted the same year, 1911, and are still in existence today (as Automotive Industries and Autocar, respectively). We might be biased, but Modern Dealership is still our favorite industry mag!
In 1919, GM forms the General Motors Acceptance Corporation, offering terms of 35 percent down with the balance to be paid in installments over a single year. With the buyer driving their new car away that day, auto financing as we know it is born. By the mid-’20s, three quarters of car buyers financed.
Between 1918 and 1929, the number of cars on the road increases from 8 million to 23 million.
By the middle of the decade, over 10 percent of all people in the U.S. workforce are employed in the production, sales, service, or fueling of automobiles.
As evidenced by the slogan, ”See the new Auburn—Ride in it—Drive it, and if the car does not sell itself, you will not be asked to buy”, the Test Drive arrives as an integral feature of the car buying process.
By the end of the Roaring Twenties, 4 out of 5 American families have a car.
Though times were tough as the Great Depression devastates much of American culture, car makers continued to invent – automatic transmission, the V-8 engine, hydraulic brakes, column mounted gear shift, and the trunk!
Chrysler joins Ford and GM as the third of the “Big Three” and design the first car with aerodynamics in mind – its Airflow model.
The market for pre-owned autos increase – so much so, that in the mid-Twenties and again in 1937, some dealers actively junk many serviceable used cars in an attempt to steer customers back to new vehicles.
Before WWII, the American auto industry produced 4 million cars annually. During wartime, no more than 700 cars are produced in a year, all of which are conscripted into military service.
Used cars become a hot commodity in such short order that Congress is forced to enact legislation to cap used car prices. Due to the demand, cars are often pulled from junkyards to be reconditioned.
Dealers survive the war by turning their focus to used cars, as well as parts and service.
Even as troops return home new cars are in short supply. For each new car manufactured, a dozen customers are in line to buy.
As the Fifties approached, glitzy new showrooms are the centerpieces of increasingly adept advertising strategies, selling the status associated with car ownership as much as the automobiles themselves.
By 1955, over 20 million licensed drivers in the US are women and the automotive industry try new marketing approaches. From Charlotte Montgomery’s Handbook for the Woman Driver offered at many dealerships, to “Ladies’ Nights” promotions pairing fashion and cars, dealers learn to consider women as serious shoppers who prefer courteous staff and impeccable facilities.
In 1956, President Eisenhower signs the Federal-Aid Highway Act, creating the Interstate Highway System, which further increases the demand for cars and car-related services.
The Fair Isaac Company creates the first FICO score, still used in determining consumers’ creditworthiness today.
A ubiquitous feature of car buying, the window sticker is introduced and becomes federally mandated on all new automobiles listing specifications, fuel efficiency, and any added-on optional equipment.
Celebrities extolling the virtues of a particular maker’s cars go back at least as far as the Twenties, when Fatty Arbuckle lent his influence as the foremost comedian of the day to Pierce-Arrow. By the late Fifties, Groucho Marx lent his smooth salesmanship to the “De-Lightful, De-Lovely DeSoto” on television, persuading customers to give a DeSoto the “Five Mile Trial” test drive at their local dealer.
Dealer promotional models were popular & help market cars to consumers. Surviving examples are now coveted collectibles.
Demonstrator cars allow on-the-fly test drives to anyone a salesperson may meet while out and about. Not just a perk for sales staff, “Demo” cars help make sales for decades.
Power steering and air conditioning in cars are introduced as comfort and convenience become increasingly important. Auto accessories become popular. One great example is the dual-purpose Chevrolet Car and Home Electric Shaver Unit.
As prosperity drives new car sales, the used market grows alongside it. Programs such as GM’s “OK Used” and Studebaker’s “ABC- Always Buy Certified” increase buyer confidence in pre-owned vehicles.
As postwar prosperity continues, more Americans could afford cars than ever before.
Muscle cars arrive, offering higher performance coveted primarily by young men in the burgeoning culture of street and drag racing. By the late ’60s, cars in film, such as Bullitt’s Mustang, become iconic. Despite later associations with machismo, the Mustang is initially marketed to women. The first model is sold to a 22-year-old schoolteacher, Gail Brown. She still owns the car.
On the decidedly mellower end of the spectrum, the Volkswagen Bus becomes a hit with surfers cruising the coast in search of waves, and later with hippies looking for an affordable vehicle that could transport more passengers.
VW has plans for a 2022 update of the Sixties classic as an electric vehicle.
Congress passes the Clean Air Act.
Los Angeles smog in the 1970s is known to be the key factor in driving the industry to produce cleaner, less polluting engines.
On October 17, the Arab states of OPEC begin the first oil embargo against the United States, starting a subsequent energy crisis. Fuel efficiency is a much larger concern, and jump starts the rise of imports. Typically smaller, more efficient, and producing fewer emissions, import cars took 16 percent of the American market share by the mid-70’s.
While the embargo only lasts until March 1974, the entire automotive industry is irrevocably altered, along with the American relationship to cars and driving.
There is some small reprieve for bigger, thirstier cars. Modified vans become a staple of ’70s car culture, and larger cars like the Chrysler Cordoba become popular – surely in no small part due to commercials featuring Fantasy Island’s Ricardo Montalban touting the luxury model’s “rich Corinthian leather.”
The Reagan Administration requests voluntary export restraints from Japan to the U.S. market. This leads Japanese manufacturers to produce more profitable upscale cars. Between 1986 and 1989, Honda, Toyota, and Nissan launched Acura, Lexus, and Infiniti respectively.
While the American market makes considerable strides to catch up with efficient, inexpensive imports, the perception of American cars (even fictitious future ones) as oversized gas guzzlers largely persists: see 1987’s Robocop and its “6000 SUX” 8.2 mpg car ad
Carfax is founded. Initially launched to help curb odometer fraud, Carfax begins distributing vehicle history reports to dealers via fax machine. CarFAX, get it? This early step toward the use of newer communications technology presages the internet boom, including the 1996 launch of Carfax’s own website, which offers consumers the same vehicle history reports available to dealers.
Affording customers a measure of confidence by providing documention of a vehicle’s history, Carfax adds a degree of transparency in the buying process. This allows customers added peace of mind and helps dealers display integrity.
Throughout the ’80s, cars and pop culture continue to be inseparable. Would Back to the Future be the same without the DeLorean, or Miami Vice without Ferraris?
On July 30, 1990 the first Saturn is completed. While part of GM, Saturn positions itself as “a different kind of car company, a different kind of car.” The brand’s no-haggle pricing, salaried, low-pressure salesforce not reliant on commission, and keen focus on customer service are somewhat ahead of the times.
Buyer expectations begin to shift toward a shorter, streamlined, more pleasant shopping experience. At least partially thanks to Saturn’s business model, dealer focus trends away from the one-time sale and on to building relationships with customers.
The World Wide Web is first made available to the public in 1991. Though slowly at first, the game is changed forever.
Google is founded in 1998. While not the first search engine, Google quickly comes to dominate the field with superior search algorithms. This allows buyers unprecedented quick and easy access to virtually any information, from specs to reviews of vehicles and dealerships.
Toyota markets the first Prius in the U.S. as a 2001 model, bringing an increased focus on eco-friendly alternative-fuel vehicles.
The shift toward the “Web 2.0” paradigm begins as sites become increasingly interactive with visitors able to leave comments, creating a truly participatory online experience.
Database management and data-mining software allow dealerships to reach out to customers in increasingly personalized ways.
Sport utility vehicle sales peak in the U.S., with 3,314,000 total SUVs sold, before declining in popularity. They’ll see a resurgence after 2010.
61 percent of initial contact is by walk-in to a dealership, but 59 percent of the customer’s shopping time is spent online before, after, or even during the initial showroom visit. 88 percent of customers use multiple devices to shop, spending an average of nearly nine total hours vehicle shopping.
As recently as the early 2000s, buyers visited five dealerships before making a purchase. A buyer today will visit an average of just 1.2 dealerships. Customer polls rate satisfaction is lowest with regard to length of time spent in the buying process. While customers may be happy with the overall experience, interactions with dealership staff, and test drives, data shows that streamlining the process is invaluable.
In 2016, Pando, the industry’s first dealership communication and collaboration tool, hits the market, connecting dealership staff and vastly improving the customer experience.
The average age of cars on the road has climbed to 11.4 years in 2016. It was 5.6 years in 1970. Dealerships incorporate service-to-sales software in response to the growing number of service appointments and resultant customer needs.
Another industry first, in 2018 AutoAlert’s Customer Experience Management (CXM) platform ensures a seamless, personalized experience both online and offline for customers throughout their journey.