auto reconditioning center entrance

OEMs Prioritize Service Parts, and So Should You

With new vehicle sales well below last year’s numbers, and in anticipation of continued soft new car sales this year, OEMs are pinning their hopes on providing parts to keep their vehicles on the road and promote their brands to customers.

May vehicle sales are about a third below the previous year and, although that is an improvement from April’s trough, it informs models that predict a loss of more than 1.5 million retail sales in 2020. It’s in the OEM’s interest to ensure that the ownership experience for their brands continues to be positive, and that means keeping supplies of service parts flowing through the supply chain.

For repair services and reconditioning operations, this is a cue to examine the efficiency of your parts pipeline and operation. What parts do you keep in your on-hand inventory, and how long does it take to acquire ordered parts? Is there a gap between when a part requirement is identified and when it gets ordered? And how long do vehicles wait for ordered parts to arrive?

AMT‘s reconditioning management systems include parts integration so that as soon as a needed part is identified, the system can either auto-approve or escalate the request for management approval. The approved part can be ordered right within the software from a list of popular suppliers or from your internal inventory. All stakeholders have visibility into parts on order and expected arrival to keep your operation running efficiently and reduce cycle-time. We’ll be adding a Parts Inventory Module in August 2020 to complete your 360-degree view of reconditioning and fixed operations our software provides.

To learn more or schedule a demo, contact us.

June 26, 2020 Business, New and Used Car Dealers, Product Related, Reconditioning Comments Off on OEMs Prioritize Service Parts, and So Should You
Used cars parked

Empathy, Cooperation are Key to Industry Restart

How to restart an industry? Work together as an industry!

Empathy, Cooperation are Key to Industry Restart
June 18, 2020 Business, Education, Future, New and Used Car Dealers, Reconditioning Comments Off on Empathy, Cooperation are Key to Industry Restart
Hertz, Thrifty and Dollar rental car logos

The Hertz Effect on Vehicle Sales

With the bankruptcy of Hertz Global Holdings, Inc., there will soon be an extraordinary volume of vehicles on offer, creating a bulge in a pipeline already constricted by the global pandemic. Hertz, down to their last billion dollars, will need to accelerate the rotation of their inventory as a cash resource to replace missing revenue from their operations.  Reported volume estimates predict vehicle counts in the hundreds of thousands.

In order to expedite this process, Hertz will be unable to move this volume through its branded sales operations, and will need to dispose of most of their vehicles through other means. Auctions would be the traditional mechanism, but ADESA and Manheim and many smaller auction houses are still at reduced capacity due to health and safety restrictions in many geographies. Hertz, or the court, will need to orchestrate direct sales to dealerships in order to liquidate as quickly and efficiently as possible.

This is an opportunity to acquire late-model vehicles with low reconditioning needs. Assets that you can prep for sale at low cost and in little time. In his recent article giving good advice on how to approach this as a dealership, Jason Unrau cautions:

“Dealers should be prepared to move quickly on rental vehicles that come to market. Snatching up batches of a particular make and model, or vehicle style, could be a great way to position a dealership in their locale. Cars bought from rental agencies tend to have extremely low reconditioning costs and offer an easy way to sell used cars at a higher volume.” 

I see this as another opportunity for our industry to “do well by doing good”. Hertz is an iconic brand family that has been set on its heels by unexpected forces. They are far from the only pandemic casualty we will see, particularly in the travel and hospitality sector, but they are the largest so far. The automotive industry has an opportunity to help them recover by purchasing these assets and infusing Hertz with the capital they’ll need to continue operations while they figure out what a post-covid Hertz looks like.  

While the reconditioning of these and other rental cars is normally less complex, they still must follow your process and be fully prepped for resale. If you aren’t using software to manage the work in your fixed ops or reconditioning department, the money you save in lower repair requirements may be lost on inefficiency in doing the work that is done. ReconMonitor™ is a software solution that keeps you in command and control of your recon operation. From acquisition through the entire process to frontline-ready, the software keeps technicians and teams on task and removes the bottlenecks that cost you valuable time and money. If you are ready to reduce your operation’s vehicle turn times and maximize your profits, you should contact us.

June 9, 2020 Auctions, Business, New and Used Car Dealers, Reconditioning, ReconMonitor 1 comment
Open for business neon

Re-creating Your “New” Business

No matter how many years or how many generations your business has been in existence, you are starting a new business. Changes in our economy and society related to the pandemic have reset nearly everything from employment to operational practices to consumer priorities. Your business will need to adapt in order to survive. Now is the time to reinvent your business to operate in the new environment.

What probably hasn’t changed: 

  1. The quality of your products and services.
  2. Your commitment to your customers, employees, and stakeholders.

What has changed:

  1. Everything else

Our society is interconnected, so when one element changes, it affects related elements across the society. High fuel prices led to subcompact cars. Lower fuel prices and greater vehicle efficiency brought on increased purchase of trucks and SUVs. Stay-at-home restrictions resulted in record sales of personal grooming products, jigsaw puzzles, and computer audio/video equipment, and effectively paused fashion and apparel sales.

Setting up your post-pandemic business plan (you need one) requires the same considerations as with any new start-up. The four P’s, product, price, place, and promotion, are still the foundation for your plan. Chances are, at least one of these variables will be different moving forward. Is your product still relevant? Is the demand and perceived product value changed and can you adjust price as a result? How will your product be consumed now? Do you need to modify the way you deliver your product to your customers? How many other people do you need to help you deliver? Finally, what changes should you make to your advertising and promotion in order to engage or reengage your buyers in the marketplace?

The answers to these questions and others will inform your way forward, but your need to assess and develop will continue. Markets and businesses may reopen more gradually than anyone would like. Volumes and budgets will be smaller, and consumer confidence will be tentative until employment and payroll numbers stabilize again.

If you run an existing business, you may benefit from your experience with other hard economic times and take the lessons learned from them to plan your own recovery. Regardless of prior events, this sudden national and global shift is more extreme that anything we have seen in our lifetimes, It is an opportunity to reinvent ourselves and our businesses in response. Every one of the four P’s is on the table for examination.

I would add another two P’s to that list, too. Examine your process and the productivity it generates. You may find opportunities to improve efficiency in your process, either by making changes or by better enforcing the processes you have in place. Management software by AutoMobile Technologies could be the right solution for running your automotive repair and reconditioning operations, and now as you reimagine and redefine your business, it’s the right time to enhance your command and control of the operation. Contact AMT and let us show you how we can help.

May 14, 2020 Business, Fleet, Future, New and Used Car Dealers, Product Related, Reconditioning, ReconMonitor, ReconPro Comments Off on Re-creating Your “New” Business
Focus on recon

Maximizing Hourly Revenue

5 Overlooked Ways To Improve Touch Time For Your SMART Business
May 5, 2020 Business, Reconditioning, ReconMonitor, ReconPro Comments Off on Maximizing Hourly Revenue
Used cars parked

Reconditioning Your Way to Profit if Used Car Values Tank

When your cars have no buyers, how do you prepare for the future? The transfer of new-to-used, used-to-auction, and rental-to-auction has been at a two-month standstill, and the cars are piling up. Just six to eight weeks ago, demand was outpacing supply, and now we have the opposite.

Dale Pollak, an executive vice president of Cox Automotive, which owns North America’s largest auto auction company, wrote in an open letter to auto dealers last week:

“Six months from now, there will be huge, if not unprecedented, levels of wholesale supply in the market, cars are coming in, but they aren’t selling. Today’s huge supply of wholesale inventory suggests supplies will be even larger in the months ahead.”

Manheim auctions are already struggling to find places to park the cars heading to auction.

Nobody, not even the best in the industry, knows which way the wind will blow when the economy reopens. We know not when, nor how the economy may reopen. Another wild card will be how fast the unemployment rate reverses and what the current experience will mean for consumer confidence. Unlike other economic downturns, this one was a giant pause button, so it may be safe to assume that many of the recently unemployed will get rehired.

Dealers are holding onto that hope, and here is the proof: used-vehicle prices at retail as of mid-April are off by just 1 percent, while wholesale values are estimated to be down 10 to 12 percent according to Pollak. It’s an odd gap.

“Generally speaking, there’s a correlation between the movement of wholesale and retail pricing,” said Pollak, Cox executive vice president and co-founder of vAuto software. “But we’re at a strange moment in time where we’re not seeing that correlation.”

One reason could be dealers remain optimistic the economy will reopen soon and so have mostly held steady on retail prices. Some may be leery of marking down vehicles acquired at pre-pandemic prices.

Pollak sees this as an opportunity for dealers willing to mark pre-epidemic purchased vehicles down to liquidate stock while stockpiling cash to be used to purchase fresh inventory at discounted prices.

Conversely, a nightmare scenario for any dealer would be to think vehicles are still worth pre-outbreak values and then take in too many trades they can neither retail nor wholesale for a profit.

With such minute transactional data available, trend-spotting is impossible, and that is the point of frustration for many dealers.

Lease Extensions Could Help Stave Off The Glut Of Used Cars

Despite total factory shutdowns, automakers are doing what they can to limit the damage to the market. General Motors Co. and Ford Motor Co.’s finance units are already offering customers one-month lease extensions. This should help relieve the pressure on both the supply and on the consumers who are reluctant to visit showrooms during a pandemic.

Plug The leaky Holes In The Reconditioning Process

“It’s critical for dealers to recognize what may be an unpleasant truth; it might take all the cash you can gather to sustain your business today and put it in a position to be viable when the market comes back,” said Pollak.

When we all get back to work, be that May or even June, one thing appears certain: used cars will be cheap to buy but possibly harder to sell. In order to get aggressive in your pricing and out-sell the dealer down the street, you need to sharpen the pencil on your reconditioning costs.

Certainly, there will be more clean used cars to purchase, but the margin gains may really come from the ones you can buy for pennies on the dollar. These may have a few more cosmetic blemishes than you are used to buying. Good reconditioning will always add value, so it is a critical element in getting the best return. That said, every cent saved in reconditioning costs is profit on the back end.

Restarting the economy will be a collective effort. Now is the time to work with your reconditioning vendors and employees to plug the holes that leak profit from your reconditioning process. If you are still using a post-it note and whiteboard system, it’s time to get out of the stone age. Though some people may be initially reluctant to learn and use it, software exists to streamline operations and can permanently fix the profit leaks in any system.

When shopping for reconditioning software, consider AMT’s ReconMonitor, a reconditioning management platform built to serve dealers, auctions, and professional reconditioning operations.

April 20, 2020 Auctions, Business, New and Used Car Dealers, Reconditioning, ReconMonitor Comments Off on Reconditioning Your Way to Profit if Used Car Values Tank
Merger

Changes to the PDR Landscape

What Does The AutoWorks and Catastrophe Solutions Merger Mean For Your PDR Business?
April 3, 2020 Business, Collision Centers, Reconditioning, ReconPro Comments Off on Changes to the PDR Landscape
Street sign displaying "Time to say Goodbye"

How to Help Your Laid-Off Automotive Employees Manage Unemployment

Social distancing is the end of in-person auto auctions, at least for a while. If you are like most auction companies, you have switched to simulcast. An online-only situation and a potentially declining demand for sales (although the numbers aren’t out yet) may have forced a layoff for some of your employees. The same is true for many related specialties, like dealerships, body shops, and large recon MSO’s. Here are some tips to help them through this process.

If you lay off or furlough your employees, they are eligible for unemployment. Some states like Mississippi have ridiculously low caps, barely enough even to buy groceries each week. As an employer, you have no control over what they can receive when they apply for unemployment benefits.

But here’s what you can do:

​Don’t block unemployment.

When the state sends out unemployment eligibility documentation, don’t mark the employee as fired for cause, which would keep your unemployment insurance rating low, but would lock the former employee out of a check. It could also save you a wrongful termination suit down the road.

Severance pay if you can afford it. 

In Maryland, you can file immediately for benefits and begin receiving a check, but other states have red tape and waiting periods. Your employees will need money now, not later, and severance will help get money in their bank while they get their ducks in a row.

Extend health benefits. 

The humanitarian thing to do during this health crisis is to continue paying benefits. You will save the bottom line in reduced salaries and payroll taxes, but be kind and keep the health insurance going at least until the nation is in the clear. Hopefully, it will only be a month or two at most.

Rehire as soon as possible. 

When life returns to normal, so too will the business demands. Your former employees are the best suited, best-trained employees for your business because they used to work there. If these employees are still available, not only will they be grateful that you wanted them back, they will probably be even more productive than they were before they were laid off.

Keep an Eye on the Federal Stimulus Package. 

As of this writing, the federal stimulus package is still not passed. But if it does, there will be some financial relief for small businesses and some options for you as an employer. It’s too soon to advise on that in a blog other than to suggest that there may be solutions for you forthcoming, and they should be taken into consideration for you and any employees you have to cut from the team.

Offer outplacement or other unique support options. 

This will definitely depend on your company’s budget, but there are outsource outplacement companies that you can hire that specialize in the outplacement of displaced employees. These experts help employees polish resumes and work their networks to find employment. This is especially useful if you have no intention of rehiring any of this staff.

Layoffs are simply one of those business decisions that you have to make to ensure the survival of the company. It can be uncharted territory for many business owners, especially in the wake of a new-to-all-of-us global pandemic. Hopefully, these tips will help you handle this rather unpleasant situation.

March 31, 2020 Accounting, Auctions, Business, Collision Centers, Fleet, New and Used Car Dealers, Reconditioning Comments Off on How to Help Your Laid-Off Automotive Employees Manage Unemployment
Empty Shelves

Will Parts Shortages Increase Your Time To Frontline Ready Following COVID-19 Shutdowns?

OEMs respond to replacement auto parts supply chain questions following the virus peak.

Each day we wake up to a changing situation. What is breaking news this morning is old news by the end of the day. Old news like all the auto factories shutting down seems like really old news even though it just happened last week. What is still new, however, is the conjecture about what the post-outbreak will hold for everybody in every industry. This is especially true for the auto industry and the many industry verticals that support it, such as parts jobbers and the collision industry.

Despite factory shutdowns amid national COVID-19 coronavirus concerns, multiple OEMs continue to assure the industry that replacement parts for body shops aren’t significantly affected. But we must understand that the situation could evolve rapidly and today’s hope could become today’s bad news.

The auctions have been shut down, putting a hold on your inventory buying, but when they reopen in a few weeks or even a couple of months, your purchases will need reconditioning, and that will require new parts. The presumed recession that will follow Covid-19 will bring with it a reduction in new and used car sales. You don’t want parts scarcity to further reduce profit on the vehicles that you do sell. Front line readiness will be where the margins are gained or lost.

What The Domestic OEMs Are Saying:

Ford

Ford announced that it would pause North American production after the Thursday evening shifts until March 30, but spokeswoman Kelli Felker told us Repairer Driven news, “Our parts depots will remain open.”

Chrysler

FCA on Wednesday said it would close “starting progressively from today through the end of March,” but spokeswoman Jodi Tinson on Thursday evening told Repairer Driven News in an email that parts distribution continued despite the shutdown to provide support for dealers and customers who rely on FCA for their repairs and maintenance.

“We are continuing to monitor the situation carefully and are taking all necessary precautions to safeguard the health and welfare of our workforce, including more frequent cleaning and disinfecting of all working areas,” said Tinson last week.

Rumor has it this will not be the case for long.

The Detroit Free Press cited two unnamed sources who reported: “the UAW and General Motors, Ford Motor Co. and Fiat Chrysler Automobiles have agreed to shut down all U.S. parts distribution centers at the end of business Friday.” The facilities would still operate with volunteer workers, according to the newspaper.

GM

GM communications senior manager James Cain said in a statement “while today will be our last day of normal operations for GM Customer Care and Aftersales, GM and the UAW have reached an agreement that will allow us to continue delivering service and repair parts to our dealers and customers, including the police agencies, fire departments and emergency service providers who rely on our vehicles all over the country. The service centers would be run by volunteers.

“These facilities will be staffed by hand-raisers,” he wrote in an email. “We will be working through staffing and scheduling plans to resume operations on Monday.”

Fiat-Chrysler

FCA issued the following statement:

Throughout this challenging period, FCA has been focused on enabling a stable supply of parts to our dealers to help keep our customers on the road. Be they first responders driving ambulances and fire trucks or commercial needs such as delivery and postal services, FCA and its dealers are working to keep all our customers operational. Following an agreement with the UAW, from Monday, March 23, FCA will begin operating our Mopar Parts Distribution Centers (PDC) using hourly-paid volunteers.

As with all our facilities, we have implemented an extensive program of cleaning and social distancing protocols across all our PDCs, and we will continue to operate with the safety of our employees as a priority. Further, for any employee volunteering to work at our PDCs, we will ensure they are all equipped with gloves and masks. FCA and the UAW are proud to continue supporting our customers when they need our help the most.

Tesla

Tesla announced it would cease production in a news release:

“As such, we have decided to temporarily suspend production at our factory in Fremont, from the end of day March 23, which will allow an orderly shutdown. Basic operations will continue in order to support our vehicle and energy service operations and charging infrastructure, as directed by the local, state, and federal authorities. Our factory in New York will temporarily suspend production as well, except for those parts and supplies necessary for service, infrastructure, and critical supply chains. Operations of our other facilities will continue, including Nevada and our service and Supercharging network.”

What the Asian OEMs are saying:

As you can imagine, the Asian OEM’s are suffering from production disruptions. Most have production facilities here in the US, but those are also shutting down.

Honda

Honda said it would stop manufacturing in North America from March 23-30, which would reduce projected production by 40,000 vehicles.

Honda spokesman Chris Martin wrote in an email, “at this time, Honda’s six-day North American new-vehicle production suspension is not expected to affect the availability of Acura or Honda Genuine Replacement Parts”.

Hyundai

An employee at the Hyundai plant in Alabama tested positive for COVID-19, prompting an immediate shutdown. Hyundai said it would reopen when it was deemed safe.

“Currently, the impact on parts availability is very minimal,” Hyundai spokesman Michael Stewart wrote in an email. “We don’t have a supply issue at this time with the exception of some select wire harnesses. There are no significant issues from suppliers from China and Korea either, and the China supply chain is recovering.”

Kia

“No parts shortages are planned or seen at this time,” corporate communications director James Bell wrote in an email.

Mazda

Mazda North America President Jeff Guyton asked, encouraged all employees to work from home through the rest of the month and suspended all business travel.

Any impact on manufacturing in the U.S. or abroad was unclear as Mazda has not put out a statement as of yet.

Mitsubishi

Mitsubishi North America CEO Fred Diaz on Thursday said all Mitsubishi “headquarters and regional team members” were working remotely.”

Mitsubishi communications senior director Jeremy Barnes on Friday described efforts to keep replacement parts distribution centers safe.

“I can tell you that we are doing everything we can to keep our parts distribution centers open while ensuring the safety and well-being of our team members,” Barnes wrote in an email. On a dealership basis, I cannot give you a blanket statement. In some states, all non-essential businesses have been closed. In some of those states, service facilities have been carved out as essential, but not in all. At this time, it’s a moving target, and we – like everyone else in the industry – are working closely with state and local officials to ensure we’re doing what we can to protect everyone, while still providing the crucial service and support our customers need in these uncertain times.”

Nissan

Nissan announced it would suspend U.S. production March 20-April 6. “Areas deemed business-essential will operate with enhanced safety measures.”.

Spokeswoman Lloryn Love-Carter confirmed that parts were considered “business-essential.”

“Our parts distribution centers continue to operate as they are deemed business-essential functions,” she wrote in an email.

Toyota

Toyota said it would stop production in North American March 23-24. On Thursday, it said it wouldn’t restart production until April 6.

In their news release, Toyota stated: “Our service parts depots and vehicle logistics centers will continue to operate.”

Toyota spokesman Victor Vanov sent an email stating, “at this time, we have ample supply of replacement parts available in our pipeline to meet customer needs, and we do not anticipate any impact due to the temporary production halt at our North American facilities.”

Subaru

Subaru issued a statement saying it would close its Indiana plant for a week: “To further ensure the health and safety of associates and to adjust the volume for market demand as a result of COVID-19, Subaru of Indiana Automotive (SIA) is suspending production, March 23-29. All associates will receive full pay during the one-week shutdown.”

Subaru of Indiana communications and external relations manager Craig Koven wrote in an email, “as it relates to the availability of replacement parts, we do not expect the one-week shutdown to have a significant impact.”

European OEMs:

Audi

Audi on Thursday said it would shutter its plants in “Ingolstadt, Neckarsulm, Belgium, Mexico, and Hungary in a controlled manner by the end of this week.”

Audi has yet to issue a statement about its U.S. operations or the status of replacement parts.

BMW

BMW corporate communications manager Phil DiInnani wrote in an email that their Spartanburg, S.C. factory remains in operation.

“As of this morning, Plant Spartanburg continues to be operational, we will keep you updated on any new developments.”

Land Rover Jaguar

Jaguar Land Rover said in a news release that it would cease production “over the course of next week” in the United Kingdom.

“The company’s intention is to resume in the week of 20 April, subject to review of the rapidly-changing circumstances. Currently, Jaguar Land Rover’s manufacturing plants in Brazil and India continue operating. The company’s joint venture plant in China reopened in the week of 24 February, as life begins to get back to normal in the country.”

Mercedes Benz

Mercedes parent company Daimler on Tuesday said it would “suspend the majority of its production in Europe, as well as work in selected administrative departments, for an initial period of two weeks.

“This is a dynamic situation that continues to evolve, and we are closely monitoring developments together with our dealer partners to ensure we are supporting our customers in a safe and responsible manner,” Mercedes said in a statement Wednesday when asked about parts. “In light of this, we will continue to make adjustments to our operations and communicate any relevant changes as needed.”

Porsche

Porsche issued a news release saying it would stop production for at least two weeks.

“As from the coming week, Porsche will suspend production for an initial period of two weeks,” By taking this step, the sports car manufacturer is responding to the significant acceleration in the rate of infection caused by the coronavirus and the resultant measures implemented by the relevant authorities.

“In addition to the primary protection of the workforce, bottlenecks in global supply chains no longer allow orderly production. At the same time, Porsche is preparing for a decline in demand and securing its financial strength with the decisions made. The parent plant in Zuffenhausen and the production location in Leipzig will be closed from Saturday (21 March 2020). These steps have been taken as part of an orderly process and in close cooperation with the works council.”

Volkswagen

Volkswagen announced that it would shut down its Chattanooga, Tenn., plant for a week.

“Effective Saturday, March 21 at 3:45 a.m., Volkswagen Chattanooga will suspend production for one week, with current plans to resume production Sunday, March 29 at 10 p.m. This action is being taken to help ensure the health and safety of our team members as we conduct additional sanitation and cleaning procedures throughout the factory. We will also use this time to assess future production plans and market developments.”

The Volkswagen Group said it would shut down Volkswagen Passenger Cars plants even longer in Europe.

“Initially, production facilities in Wolfsburg, Emden, Dresden, Osnabrück, Zwickau, Bratislava (Slovakia), Pamplona (Spain) and Palmela (Portugal) are affected, as well as the Components plants at Brunswick, Chemnitz, Hanover, Kassel, Salzgitter and SITECH.”

“The Volkswagen Passenger Cars brand is gradually suspending production at its European plants. This will also affect the Volkswagen Group Components plants. This is the brand’s response to the impending rapid decline in demand on the automotive markets. Risks in connection with suppliers’ supply chains are also increasing. This is due to the significantly accelerated rate of infection by coronavirus and the resulting measures taken by the authorities. Initially, the factories are therefore expected to remain closed for two weeks. For the affected German sites, the measures are to apply from the end of the late shift on Thursday.”

Works Council Chairman Bernd Osterloh noted in a statement that “Volkswagen has supply problems.”

Volvo

Volvo said it would shut down U.S. manufacturing in South Carolina as well as operations in Europe.

“The Belgium plant will remain closed until April 5,” Volvo wrote in an email. “The Swedish and US plants will be closed between March 26 and April 14.

“People working in our offices will generally work from home as of March 26, and the working hours will be reduced,” Volvo said these offices were in Sweden and Belgium.

Volvo has not as yet issued any statement about parts supply or supply chain issues except to note that Chinese manufacturing had reopened.

“Earlier this month, Volvo Cars reopened its four manufacturing plants in China after an extended closure period,” Volvo wrote. “Today´s showroom traffic is indicating a return to normal in China’s car market, which is clearly demonstrating the advantages of being a globally balanced company.”

So, as you can see, the ability to get replacement parts is uncertain, with some brands such as Volkswagen having more problems than others with production and parts supply. Use this information when your auction activity resumes.

March 25, 2020 Business, Collision Centers, New and Used Car Dealers, Reconditioning Comments Off on Will Parts Shortages Increase Your Time To Frontline Ready Following COVID-19 Shutdowns?
How Now Neon

5 Key Tips For Conquering More Market Share At Your Dealership

Being a successful car dealership is much more than attracting customers, efficiency among your departments, and selling cars. Those are all the basics any dealer can tell you are necessary to run a dealership business. We’re talking about knowing your market, which means understanding who you are marketing to instead of assuming everyone is a customer. That won’t do you any good if you aren’t able to meet their wants and needs. 

Here are five tips on how any dealership can conquer their market: 

1. Leverage Your Geography: A car dealership based in southern California is going to have a different market than one in northern Vermont. That’s why you want to make sure your inventory accurately reflects the area you are located in. From there, you can create promotional events and sales specifically for that region. For example, a Winter Clearance event on all 4-wheel drive pickups and SUVs would do well in Vermont, but may not make sense in sunny California.

2. Make Sure Sales Knows Your Inventory Inside And Out: In the 1950s, car makers did a great job educating their salesmen on how to sell against the competition. They developed training materials, crib sheets, and other sales aids. This is a lost art these days and is nonexistent with used cars. If your sales team took the time to look up the models in your inventory and study the safety features, performance, and options, they will come across as experts in the models they are selling, build buyer confidence and close more deals. You’ll have a better idea of what your customers want, and as a result, it’ll affect what cars you choose to have on your lot.

3. Study Customer Demographics: By having a better understanding of who the majority of your customers are, you can also determine the right cars to sell. What is the average age of your customers? Are they single professionals or families? By knowing who your customer is, you’re able to make the car buying process less of a transaction and more of an enjoyable experience by perfectly matching a car to your customers based on who they are and what their wants and needs are.

4. Have the Right Cars Ready: Knowing what your customers want will help inform your acquisition decisions, but even acquiring the right vehicle won’t help if you don’t have ready and available when the customer arrives. Your make-ready process needs to be in sync with your sales operation, to ensure the cars you need are ready and available. Keep your reconditioning operation efficient to ensure your cars are frontline-ready when you need them. Management software from companies such as AutoMobile Technologies can help keep your recon employees and vendors focused and fast.

5. Create Customer Loyalty: Dealerships can create customer loyalty in several different ways. Where a lot of dealerships fail in this department is by letting customers go as soon as they drive away in their new car. As a result, there’s a negative stigma surrounding car dealerships assuming a dealer only cares about a customer to get the sale. If you want to conquer your market, show how much you appreciate your customers (including previous ones) by sending emails, service coupons, follow up calls, and more. If a dealership goes out of its way to make a former customer feel valued, they’ll remember and let people know. 

Conquering your market as a dealership is not as simple as target advertising and selling an SUV to a couple who are expanding their family. It’s about connecting with the area you serve and creating a relationship with your customers that is far more valuable than any sale. After all, customer loyalty is one of the most useful things any business can have. Although you can’t buy customer loyalty, you can conquer your market and establish a name for yourself in the area you serve. Follow the above tips and stay consistent, and you’ll become the dealership to beat.

February 17, 2020 Business, New and Used Car Dealers, Reconditioning Comments Off on 5 Key Tips For Conquering More Market Share At Your Dealership
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