Has your dealership been struggling with inventory problems over the last few months? Then you are not alone. Across the automotive industry, new car inventory is down about 48 percent from 2020 – with trucks and SUVs hit particularly hard.
What is causing the global vehicle shortage? The problem began last year when the COVID-19 pandemic created production problems at plants and factories throughout the world. However, the issue worsened when a chip shortage made it just about impossible for automakers to build new cars.
Unfortunately, it might be a while before inventory levels return to normal. Sam Fiorani, Vice President of Global Vehicle Forecasting at AutoForecast Solutions, believes it is unlikely inventory will return to full capacity before the second or third quarter of 2022.
What can you do to make sure your dealership continues to thrive until life returns to normal in 2022? At fusionZONE, we recommend following these steps to keep your revenue up and your showroom bustling:
1. Source and Sell High-Quality Used Cars
The global shortage of new vehicles means there is probably a great deal of empty space on your lot. That empty space won’t make your dealership any money – so you would be wise to try to fill it with used cars as quickly as possible.
Of course, sourcing pre-owned vehicles is a little bit tricky at the moment. The unavailability of new vehicles means fewer drivers are trading in their old cars, trucks, and SUVs.
To get your hands on a sizable selection of used cars, you will likely need to use a variety of sourcing techniques. The following methods are among the most effective:
Offer to buy vehicles that come in for servicing or repair
Tell customers you are happy to allow them to end their lease early
Import vehicles from countries less impacted by the shortage
Send your sourcing manager to out-of-state vehicle auctions
Set up an online “Buy My Car” portal for your customers to use
When sourcing a pre-owned vehicle, try to avoid focusing entirely on your potential markup. It’s also vital to pay close attention to the quality of the car. You do not want to develop a reputation as a car dealership that sells unreliable vehicles.
2. Focus on Your Finance and Insurance Department
The number of vehicles you sell each month is likely to drop as the global inventory shortage continues. However, you can still keep your dealership revenue steady by increasing your per-customer income. The finance and insurance department is the best place to accomplish this goal.
You can increase the amount of money you make from every customer by focusing on selling the following products:
Scheduled maintenance plans
Paint and fabric protection
To keep your revenue high, you should try to ensure at least three-fourths of your buyers purchase one or more F&I products.
3. Promote Your Service Department
The inventory shortage has made it more difficult for motorists to buy the vehicles they want. As a result, many of them are choosing to continue to drive their old cars for another couple of years.
Those older vehicles will require regular servicing, and you can keep your revenue up by being the dealership to provide it.
You can use the following techniques to promote your service department to the motorists in your area:
Add service-related videos and pictures to your social media
Post car maintenance tips and advice on your dealership’s blog
Once you get motorists into your service department, don’t forget to have a sales associate ask them if they are interested in buying a new vehicle.
4. Offer a Selection of Accessories
Don’t force your customers to turn to Walmart or Amazon when they want to buy an accessory for their car. By offering a wide selection of products at your showroom, you can increase your overall revenue and build better relationships with the motorists in your area.
The following accessories are particularly popular with drivers:
Phone mounts and chargers
Trunk storage organizers
Cup holder trash cans
Should you decide to start stocking accessories like these, don’t forget to promote them on your social media profiles and add a dedicated page for them to your dealership’s website.
Need Help Boosting Your Dealership’s Revenue? Contact the Experts at fusionZONE!
Would you like some help generating the revenue you need to get through the vehicle inventory shortage? Then please don’t hesitate to get in touch with the team at fusionZONE. We have years of experience in the industry and offer a range of products that can make your dealership thrive – even in this challenging business climate.
To learn more about our services, please fill out our online contact form or give us a call at (424) 232-0728. We look forward to working with you!