Navigating the Auto Industry in a Time of Change


The automotive industry has been experiencing rapid changes involving technology advancements, cost structures, client experience and changes in our macro environment. The theme here is change, and with change often comes growth and expansion. BMO is experiencing its own change as we are proud to announce Andre Salvi as BMO’s newly appointed Group Head of Commercial Automotive Finance. Salvi will be succeeding Robert Sadokierski, who is set to retire after more than 20 years of outstanding contributions to the industry.

Recently, we spoke with both leaders to get their perspective on changes within the auto industry. The combination of Sadokierski’s decades-long involvement in the industry and partnerships with dealers from across Canada and across all manufacturers, and Salvi’s viewpoint having previously run BMO’s Technology and Innovation Banking and Asset Based Lending teams, led to an engaging mix of expertise, experience and breath of knowledge, providing an insightful take on where we are as an industry and how we’re navigating change.

Digital vs traditional, who wins?

Over the past 20 years, Sadokierski has seen the auto industry heavily evolve from an industry where customers preferred and expected a mass selection of cars and inventory on the lot and a full sales experience. This expectation has changed rapidly over the past few years with the COVID-19 pandemic accelerating the adoption of technology from research to purchase. “We’ve really progressed a lot as an industry and you now have the option to take the traditional tried and tested approach of coming in for a test drive and arranging the financing to now being able to essentially do all of your research and financing before walking into the dealership, its remarkable,” stated Sadokierski.

According to Salvi, there has been a significant number of investments made in technology start-ups, analytics and other platforms transforming all industries, including auto. “From my perspective the amount of talent, thought and investment dollars going into the growth and deployment of technology is incredible, consumers are hungry for products and tools that help them make more informed decisions. This can lead to information overload in some cases, but overall, we’re seeing a cohort of buyers, from new to used, now armed with a lot of information to help them feel great about their next purchase or lease and I’m seeing this across the country as I meet and visit with clients.”

As always, the successful dealers are going to be the ones who cater their car buying experience to the preferences of the consumers in their markets. There will never be a one-size-fits-all approach when it comes to how much (or how little) technology is used.

What is the value of the real estate dealerships occupy?

There’s no question that dealerships in prime and secondary markets are now faced with the question as to whether to keep or sell their land. Sadokierski adds, “the opportunity for some long-standing landowners in prime urban locations is a tough one, in spite of increasing rates we’re still seeing exceptional land values and with the use of technology shaping the buying experience, owners are asking themselves if it’s an opportunity to redesign the physical client experience or if it’s time to sell and move on.”

How do we navigate the changes and uncertainty ahead?

When asked about navigating challenges and uncertainty within the auto industry, Sadokierski explained, “a lot of dealer principals and operators have weathered many storms, whether it was through the Global Financial Crisis in 2008-09, or the most recent COVID-19 pandemic’s early days of shutting everything down, I can’t help but think of the resiliency within this industry. In my opinion, the operating discipline and depth of knowledge within the Canadian market is second to none and I expect operators, service staff and front-line sales teams to continue meeting clients where they’re at.”

In addition, Salvi provided his perspective on navigating an evolving industry, “the operating models in place from sales to service bays continues to provide dealerships with enough levers to manage a disciplined business. I am not surprised to see a vast majority of dealerships using and leveraging technology inside their stores to run leaner but also allowing customers to create their own experience.”

While the industry is changing and the leadership in BMO’s Commercial Auto Finance team may be changing, what won’t change is dealers’ commitment to giving consumers a great experience, and our commitment to helping dealers achieve their goals.