Circles Weekly · Feb 13 - Feb 20, 2026

Mixed Sales & Service Performance: Dealer-reported experiences indicate a slow start to January and February, though momentum is building for some. Toyota dealers noted service and parts business increasing by 15% year over year for customer pay, alongside a 37% rise in new car sales through Monday, largely attributed to enhanced inventory. Conversely, some CDJR stores reported varied outcomes, with one seeing a 20-unit increase over the prior year during the first 18 days of February, while another observed a 15-20 unit decline.

Used Vehicle Inventory & Acquisition: Dealers are facing difficulties in maintaining or increasing used car inventory. Despite this, some are paying higher prices for late- model used vehicles but sustaining above-average profits by leveraging indirect credit unions for larger advances. A specific strategy involves using SmartAuction where Ally allows the inclusion of the paid price plus fees and transport for trade book values, proving effective for Toyotas, Hondas, and various used sedans.

Operational Adjustments for Margin: In response to high acquisition costs and market pressures, operators are implementing strategies such as reducing reconditioning expenses, accepting tighter margins, and actively collaborating with financial institutions to maximize backend gross profit. An independent dealer reported an average reconditioning spend of $1800 per vehicle. Pricing transparency is also a focus, with one dealer noting a $1000 finance incentive often serving as negotiating room, resulting in an average discount of $238.

New Acquisition Restrictions Implemented: Stellantis has reportedly instituted a policy capping dealership acquisitions at one store per year, with a maximum holding of 10 dealerships for any single ownership group. Buyers may obtain an exemption by entering a specific framework agreement.

Market Consolidation & Valuation Impact: Dealers express considerable concern regarding the policy's potential to diminish group sales value and asset valuations, anticipating "lots of value lost". Some analysts suggest this move could prompt certain dealers to exit, thereby passively reducing the network size without direct OEM expenditure. The policy is also viewed as an effort to stabilize valuations and decelerate consolidation by larger groups, aiming to preserve network stability amid market adjustments.

Carvana's Role: The policy is widely perceived as a direct response to Carvana's increasing presence in the dealer network, especially given anecdotal reports of Carvana "tripling sales" at acquired stores.

BI & Analytics Platform Adoption: Dealers are actively seeking sophisticated alternatives to existing Business Intelligence and analytics platforms. Qlik Analytics is gaining traction, valued for its executive-level capabilities and its ability to integrate diverse data sources beyond the DMS, leveraging PowerBI for custom reporting. New platforms featuring integrated AI for performance review and insights are also under evaluation.

AI for Service Efficiency: Pilot programs for NUMA AI in service departments, specifically within Toyota and Lexus stores, have demonstrated robust appointment booking rates, ranging from 28.4% to 37.7% from outbound texts triggered by service connect alerts. Another dealer reported leveraging Numa within their service department's phone tree to automatically direct callers to online scheduling via text and to convert voicemails into text-based communications for advisors.

Chat Tools & CRM Integration: The industry is observing a notable transition in website chat tool preferences, with an emphasis on solutions offering deeper CRM integration. One dealer reported a successful switch from Podium to Drive Centric chat, citing substantial cost reductions and seamless native integration. While established chat platforms remain functional, the omnichannel capabilities of newer solutions, alongside the ability for sales teams to directly engage in conversations, are emerging as key advantages.

Proactive Service Appointment Strategies: Dealerships are implementing refined strategies to secure initial service appointments, including having sales staff schedule estimated first appointments at the point of vehicle delivery. Additionally, automated text and email campaigns are being explored for 6 months post-purchase, incorporating direct links for convenient online scheduling.

Lifetime Maintenance Programs: Several dealers are either considering or have already introduced basic maintenance plans, such as oil changes and tire rotations, bundled with every new and used vehicle sale. These programs aim to foster long- term service retention. Funding models include allocating $250 from each car sale. Some programs specify limitations, such as covering 5L of oil and filter, requiring adherence to the dealership's service guide, or imposing a 2-3 year duration.

Addressing Digital Lead Engagement Friction: The recent Apple iOS 26 rollout, featuring stricter call and text message filters, has raised concerns among dealers, with some reporting year-over-year declines in phone ups, even as internet leads increase. To counteract this, some dealerships are adopting a "text first, then call" approach, where an introductory text is sent before a call, aiming to make the subsequent phone call "less cold" and improve overall contact rates with internet leads.