October is here…quarter four. The changing of leaves normally signals a change in our industry. We start to tighten the inventory for year-end. And we need to make sure our lot is right in preparation for what’s to come. The market trends down as people save for Holidays. This is the normal pattern that we are used to seeing in automotive retail.
Well, this year is nothing like previous years. I wrote last time about the chip shortage…and that is unfortunately continuing. New car inventory is still delayed. Used car inventory is tight. How many dealers have a list of customers right now waiting on new inventory to come rolling in on the truck? I’ve been talking with my industry peers to explain that even my mother-in-law is calling me with articles she is reading about the supply chain issues in automotive. It is a big deal…and a bigger deal than originally thought.
So, what can we do? What can we focus on in quarter four to help us be successful in the years to come? I mentioned above how customers are putting their names on lists to wait for a new truck, sedan, whatever. Think about that for a moment. Customers are informed there is a shortage and willing to WAIT ON A LIST. We as an industry need to remember this example for years to come. Transparency works. And that is an important lesson to learn.
We need to focus on informing the customer. Teach them about what the market is doing and change our closing philosophy from negotiation to consultation. We’ve all heard this before, but it holds true now more than ever before.
On the used car side, we are seeing high book valuations. We need to discuss the current market for that particular unit. Consult with the customer on why this unit is priced right and right for them. We need to take the extra step and use the tools we have to converse with the shopper. Being transparent is a win-win for both parties. Your dealership achieves its goal while your customer drives out with a new car (or has their name added to the waiting list).
I am assuming a lot of dealers are able to use the one-price approach right now. Let’s remember this for years to come and leverage the tactics that the market has “forced” on us today for the future. Be the dealership you want to shop at. Learn lessons from adversity and improve upon your situation to be the lot that consumers desire.