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Q1 Wrapped: Which Trends Are Expected to Continue?

With Q1 in the rearview mirror, it’s important dealership leaders assess which predicted trends have come to fruition – and which are still evolving. As proactive dealers have seen time and time again, revisiting what has happened in the past will be key to gaining insight into the automotive industry forecast in 2023.

Looking ahead, it’s important for dealers to assess their performance across multiple departments, including:

  • Service drive
  • Inventory
  • Customer loyalty
  • Sales and beyond 

By doing so, they can identify areas where they have done well and where they need to improve.

Dealers can identify the areas they need to focus on to stay ahead of the curve by analyzing their dealership’s performance across departments. This includes benchmarking their efforts against other dealers in their market and comparing it to the predicted trends.

Overall, taking a close look at dealership performance in Q1 can provide valuable insights that can lead to better performance and success for the rest of the year. In this blog post, we’ll analyze what happened in Q1 2023 in the automotive industry and the most notable dealership trends related to the service drive, inventory and customer loyalty. 

Q1’s Most Notable Dealership Trends

Q1 of 2023 saw the continuance of several notable trends in the automotive industry. One prediction that became a reality was the increased adoption of digital technologies by dealerships. With the ongoing shift to digital and the rise of e-commerce competition, many dealerships have shifted towards offering:

  • Virtual showrooms 
  • Online sales 
  • Contactless service options

Another trend that was popular across the industry during Q1 was the focus on customer experience and convenience. Dealerships are increasingly investing in their service drives, offering amenities that encourage customers to visit the dealer instead of the cheap mechanic down the road, such as:

  • Free WiFi
  • Refreshments
  • Comfortable waiting areas

Additionally, dealerships are offering more flexible service scheduling options, such as online booking and mobile service units.

The most significant trends for dealerships include those related to the service drive, inventory acquisition and customer loyalty and retention. With the ongoing chip shortage and supply chain disruptions still hampering acquisition efforts, adding useful inventory has become a major challenge for dealerships. Those that can effectively manage their inventory and offer a wide selection of vehicles to customers are likely to succeed in the current market.

Additionally, customer loyalty and retention have become more crucial than ever as customers have more options and increased expectations for convenience and service. Dealerships that prioritize building strong relationships with their customers, offering personalized experiences and providing excellent service are more likely to retain customers and attract new ones through positive word-of-mouth.

Service Drive

In Q1 of 2023, service drive trends focused heavily on enhancing the customer experience to meet the new kind of demand created over the last few years. In addition to creating more comfortable waiting areas for customers with upgraded amenities, dealerships have adopted new technologies and service options to provide more convenience for their customers, such as: 

  • Online booking
  • Mobile service units
  • Contactless service options

Compared to Q1 of 2022, there has been a significant increase in the focus on enhancing the service drive experience for customers. Dealerships have been forced to adapt to changing consumer preferences, including a desire for more contactless and convenient service options. Dealerships that have been successful in meeting these changing demands have seen improved customer satisfaction and retention.

These service drive trends are expected to continue into Q2 and beyond, as customers continue to value convenience and comfort. Simply put, dealerships that can provide a seamless service experience, with personalized options and contactless service offerings, are likely to attract and retain more customers. Additionally, with the ongoing chip shortage and supply chain disruptions affecting inventory availability, dealerships that can provide excellent service and maintain customer loyalty may be able to differentiate themselves in a highly competitive market.

Acquire Inventory

In the first quarter of 2023, the automotive industry faced significant inventory challenges due to the ongoing chip shortage and supply chain disruptions. As a result, dealerships have adapted by: 

  • Diversifying their inventory sources 
  • Relying more on used cars 
  • Prioritizing high-demand vehicles to meet customer needs 

Additionally, dealerships have been exploring new supply chain strategies and leveraging technology to manage inventory more efficiently.

Compared to Q1 of 2022, the inventory trends in Q1 of 2023 reflect the continued impact of the chip shortage and supply chain disruptions on the industry. However, dealerships have become more proactive in managing their inventory and have adjusted their strategies to focus on used cars and high-demand vehicles.

According to the Cox Automotive Dealer Sentiment Index (CADSI) for Q1 2023, used vehicle sales remained strong during the quarter, with 64% of dealers reporting that sales were either strong or very strong. Additionally, 70% of dealers reported that used vehicle inventory was either low or very low, indicating continued demand for used vehicles in the market. The report suggests that the ongoing supply chain disruptions and chip shortage have contributed to increased demand for used vehicles, as customers seek alternative options due to limited new vehicle availability.

It is expected that the inventory trends in Q1 will continue into Q2, and possibly beyond. While the supply chain disruptions are expected to persist, dealerships that can adapt their inventory strategies to focus on used cars and high-demand vehicles are likely to perform better. Furthermore, dealerships that leverage technology like Mastermind, to manage their inventory efficiently, may be better positioned to meet customer demands and maintain profitability in a challenging market.

Loyalty & Retention

In Q1 of 2023, dealerships focused on loyalty and retention by placing greater emphasis on customer service and personalization. To build strong customer relationships, forward-thinking dealerships offered personalized experiences and services to each individual customer. For example, dealerships have provided tailored financing and leasing options to meet customer needs and preferences. Another trend was the increasing use of technology to improve the customer experience, such as virtual vehicle walkarounds and online service scheduling.

These trends were present in Q1 of 2022, but with less emphasis on personalization and technology at the time. Dealerships placed greater focus on traditional means of connecting through building relationships with customers using quality service and communication. Personalization and technology were beginning to gain traction at the time, but not at the same level as they have in 2023.

These trends are expected to continue into Q2 of 2023, as dealerships continue to prioritize customer service and personalization. As customers become more tech-savvy and demand greater convenience, dealerships will need to continue to innovate and invest in technology to improve the customer experience. Building strong customer relationships and providing tailored services will remain key factors in driving customer loyalty and retention.

Looking at Q2 & Beyond

Based on the trends and performance observed in Q1, it is expected that critical roles in dealership success in Q2 will be attributed to:

  • The service drive
  • Inventory management
  • Customer loyalty
  • Sales departments 

Dealerships that prioritize providing an exceptional customer experience, with personalized service options and contactless offerings, are likely to maintain high levels of customer satisfaction and retention. 

Additionally, as the chip shortage and supply chain disruptions continue to impact inventory availability, dealerships that can adapt their inventory management strategies and focus on used vehicle sales may be better positioned to thrive.

As the spring season approaches, dealerships may see additional trends emerge that impact the industry. For example, the rise of electric vehicles (EVs) may prompt dealerships to consider adding EVs to their inventory and investing in charging infrastructure. 

Advancements in technology, such as virtual reality (VR) and augmented reality (AR), may also provide new opportunities for dealerships to enhance the customer experience and differentiate themselves from competitors. Dealerships that stay up to date with the latest industry trends and prioritize customer satisfaction are likely to be the most successful in the coming months.


As dealership inventory trends continue to evolve, it’s important for dealers to take a smarter approach to managing their new and used vehicle inventory. To stay ahead in Q2, proactive dealers are leveraging data-driven technology to:

  • Leverage the service drive to fuel sales and retention efforts
  • Forecast future demand and optimize new and used vehicle inventory
  • Efficiently target conquest customers
  • Proactively promote customer retention

By utilizing a comprehensive data platform like Mastermind to fuel their sales and acquisition efforts, dealerships can develop effective inventory management strategies that generate sales and maintain customer loyalty. Furthermore, potential buyers can benefit from these tools by receiving personalized outreach and access to inventory that matches their specific needs and preferences.

Interested in learning how Mastermind can help your dealership maximize vehicle sales and acquisitions? Prepare for the future of automotive industry trends. Contact us for a free demo.