Dealer Marketing Magazine
December 2017
Dealership inventory management has long been an imprecise science that combines precedent, data, and dealers'intuition. And that's before all the variables are added in that affect inventory decisions: economic trends, changing consumer preferences, manufacturer demands and allocations, unforeseen events that affect supply and demand, and more.
This year has certainly been an example of the variables, with the downturn in new vehicle sales and oversupply of preowned vehicles throughout the year suddenly jolted in September by the catastrophic Category 4 hurricanes, Harvey and Irma, which destroyed about 1 million cars, primarily in Texas and Florida.
The effect on the automotive industry was profound; by October, pre -owned vehicle sales were up by about 8%, and the used car SAAR jumped to 40.4 million units, up from 38.1 million in August, while new car inventory declined to about 4 million units. Assuming no more similar disasters occur the rest of 2018, supply and demand will likely stabilize, but it just shows how volatile the market can be.
At the same time, American consumers are turning away from what used to be its go to market segment midsize sedansin favor of crossovers, SUVs, and trucks—meaning that the right late model preowned vehicles can often be a hotter commodity for dealers than the latest and greatest offerings. Yet manufacturer allotments and the continued reliance by OEMs on incentives can hamstring dealers' inventory flexibility and autonomy.
Managing dealership inventory is, more than ever, a balancing act of data and tools, experience, flexibility, and research. To learn how to find the right balance, we asked three industry authorities with extensive backgrounds in automotive marketing, sales, and pre -owned vehicles to share their thoughts.
Indeed, their insights point to the need to combine human factors like research, discipline, and attention to the customer experience, while taking advantage of the power of today's technology and inventory management tools. The right balance can be found, but it takes more work and skill than ever to find it.
Mark Maida, Autobuy
Mark Maida, an automotive remarketing veteran and successful entrepreneur, founded AutoBuy (www.wepaythemax.com) with his son Anthony, and built it into a national business that has helped 100,000-plus private sellers, appraised $1 billion-plus in inventory and, with its eight locations (and more on the way), is helping to upend traditional automotive remarketing to the benefit of consumers and auto dealerships. Maida started his automotive career as a Chevrolet salesman, and his extensive remarketing background includes founding a successful vehicle wholesaling business, as well as a used vehicle store and tent sales business that he sold to Enterprise Rent-A-Car.
Mark Sargeant, AutoMap
Mark Sargeant is the sales and marketing manager at AutoMap, the leading inventory tracking and audit solution for dealerships today. Through AutoMap, dealer sales teams, management, and auditors are able to find any vehicle in their inventory across multiple lots in seconds. The solution decreases staff frustration, eliminates customer waiting times, and accelerates floor audits and sales. Using AutoMap, a Bluctooth-enabled onboard diagnos-tics device (OBD) chip is attached to each vehicle, a simple setup that takes less than 30 seconds. Once the device is enabled, each vehicle's location is broadcast to the main software site, and can be tracked. Dealership staff can instantly search inventory by V1N, stock number, or model across multiple lots on their computer or smartphone through the AutoMap mobile app.
Jeff Risner, The Appraisal Lane
Jeff Risner is co-founder and CEO of The Appraisal Lane, a real-time used car trade network and commu-nications platform. He is a seasoned industry professional, with more than 30 years of automotive retail and wholesale experience. Jeff is the co-owner of the Georgia-Carolina Auto Auction and former vice president of new and used vehicles for Lithia Motors (NYSE: LAD). Jeff was also a founding associate at CarMax (NYSE: KMX).
Source - Automotive News